Shares of the New York stock of Alibaba Group (NYSE: BABA; HKEX: 09988) tumbled 9% in early trading Tuesday after Shanghai and Hong Kong put its fintech arm’s record-breaking IPO on halt.
Controlled by Chinese billionaire Jack Ma, and 33% owned by Alibaba, both Stock Exchanges of Shanghai and Hong Kong made an announcement Tuesday stating that Ant’s mega $34.5 billion listing has been suspended.
Specifically, the Shanghai Stock Exchange referenced a meeting Monday that Jack Ma, along with chief executive officer Simon Hu and executive chairman Eric Jing was summoned to by China’s top financial regulators on why the IPO has been suspended.
“Recently, your company’s actual controller, chairman and general manager have been jointly summoned and interviewed by the relevant regulatory authorities,” CNBC cited a translation of comments by the exchange in Mandarin.
Further, “Your company has also reported significant issues such as the changes in financial technology regulatory environment. These issues may result in your company not meeting the conditions for listing or meeting the information disclosure requirements.”
Before the news broke, it appeared Ant had finally overcome a slew of challenges ahead of the listing, as it priced its IPO to raise $34.5 billion last week.
One of the hurdles included China’s Securities Regulatory Commission postponing the IPO earlier this month because of a probe on Ant’s mobile wallet for a possible “conflict of interest.”
While trading was initially set to commence for Ant in Hong Kong and Shanghai on Thursday, things have now taken an unexpected turn.
“This is a curve ball that has been thrown at us .. I don’t know what to say,” a Banker working on the listing said, as cited by Reuters.