We now know what happened to Ant’s highly anticipated IPO

Written by: Jayson Derrick
February 16, 2021
  • Jack Ma's Ant was among the most highly anticipated IPOs in 2020.
  • The company was forced to cancel its IPO plans due to political interference.
  • According to WSJ, Ant's ownershp structure is party to blame.

Jack Ma’s fintech giant Ant (formerly known as Ant Financial) was scheduled to become a public company in late 2020 but orders from Beijing quickly put an end to those plans. According to The Wall Street Journal’s sources, we might now know what happened before the scenes.

More than just Ma’s public comments

Ma, a co-founder of Alibaba Group Holding Ltd (NYSE: BABA) is considered one of, if not the most powerful private citizens in China. So when he publicly spoke out against China’s financial system, Beijing took immediate action.

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Chinese authorities initiated a new anti-monopoly investigation into Alibaba while Ant officials were summed for “supervisory and guidance talks.” 

According to WSJ’s sources, Ant’s botched IPO was the result of more than just Ma’s public comments. According to more than a dozen Chinese officials and government advisors, Beijing was concerned with Ant’s ownership structure.

Hiding behind Ant’s complex ownership structure are very well connected political individuals who would pocket billions of dollars and “represent a potential challenge” to China President Xi Jinping and his government, WSJ noted.

Under Xi’s leadership, he acted swiftly to prevent the quick and vast accumulation of wealth that Ant’s major shareholders would have collected as part of what is described as an anti-corruption campaign.

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Ant’s investors are named

One of the major investors in Ant that stood to make a lot of money was Boyu Capital, a private-equity firm founded by Jiang Zhicheng, a grandson of ex-Chinese leader Jiang Zemin, according to WSJ. Jiang’s close allies were among those impacted by Xi’s anti-corruption crackdowns.

Harvard-educated Zhicheng is a “princeling” — a title given to family members of Chinese leaders. His Hong Kong-based firm became an Ant investor in 2016 despite Chinese regulations restricting “offshore” investments in payment services, according to WSJ. To get around the roadblock, Zhicheng set up a subsidiary in Shanghai and was able to buy shares in Ant.

Li Botan, the son-in-law of a former senior leader Jia Qinglin, is another major shareholder that crossed paths with Xi’s government. Botan was known for hosting parties full of mistresses that Xi despised because it turned Chinese people into cynics. 

What’s next for Ant

Ant could be forced to reclassify itself as a financial firm and become subject to new capital requirements reserved for traditional banks, according to WSJ. This would open the door for Beijing-controlled entities or big state banks to acquire large stakes in Ant which by default would dilute the stakes of existing investors.

Meanwhile, Ant’s IPO plans remain unclear.


“Whether the company can revive its IPO or not is not within the scope of the high-level government agenda right now,” a WSJ source told the publication.