Ant Group IPO pulled after inquiry reveals likely beneficiaries, report says

When China’s leader Xi Jinping late last year quashed Ant Group’s initial public offering, his motives appeared clear: He was worried that Ant was adding risk to the financial system, and furious at its founder, Jack Ma, for criticizing his signature campaign to strengthen financial oversight, the Wall Street Journal reports.

There was another key reason, according to more than a dozen Chinese officials and government advisers: growing unease in Beijing over Ant’s complex ownership structure—and the people who stood to gain most from what would have been the world’s largest IPO.

In the weeks before the financial-technology giant was scheduled to go public, a previously unreported central-government investigation found that Ant’s IPO prospectus obscured the complexity of the firm’s ownership, according to the officials and government advisers, who had knowledge of the probe.

Behind layers of opaque investment vehicles that own stakes in the firm are a coterie of well-connected Chinese power players, including some with links to political families that represent a potential challenge to President Xi and his inner circle.

Those individuals, along with Ma and the company’s top managers, stood to pocket billions of dollars from a listing that would have valued the company at more than US$300 billion.

China suspended Ant Group’s listing in November. The Shanghai stock exchange suspended the IPO on the Star Market, prompting Ant to also freeze the Hong Kong leg of its dual listing.

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