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Just a couple of years after a high-profile tussle that saw e-commerce giant Alibaba ditch Hong Kong to make its record-breaking IPO in New York, talkative founder Jack Ma is gearing up for a similar game of chicken for an upcoming IPO by his company’s affiliated Ant Financial unit. That’s my initial assessment, following media reports that Ma has said his first preference would be a Hong Kong IPO for Ant Financial, China’s leading private financial services company whose prize asset is its Alipay electronic payments service.
Ant Financial has burst into the headlines over the last two years, growing rapidly to become a sector leader as China opens its tightly controlled financial services sector to private investment. The company’s core Alipay service was actually once a part of Alibaba itself, but was spun off into a separate company controlled by Ma and other top executives five years ago due to China’s rules forbidding foreign ownership of such companies.
It’s a bit unclear if those rules have been relaxed since that spin-off, which resulted in a big spat between Alibaba and U.S. Internet giantYahoo, which owned 40% of Alibaba at that time. But based on Ma’s latest comments, it would appear that the foreign ownership rule has been relaxed as China opens the market to foreign investment, or perhaps that a Hong Kong listing isn’t considered foreign ownership.
The latest reports don’t have much detail, and simply quote Ma responding to a reporter’s about whether Ant would like to list in Hong Kong by saying “I very much hope so.” (English article)Ma also responded to a question about an ongoing probe into Alibaba’s accounting practices by the U.S. securities regulator, saying such scrutiny was a “good opportunity” for people to better understand his company.
But let’s return to Ant Financial, whose planned IPO has been the subject of frequent discussion for more than a year. The company was originally eyeing a listing on a new strategic emerging industries board being planned to launch in Shanghai later this year. But that plan has been put on indefinite hold due to volatility in China’s other stock markets, forcing Ant and others to look elsewhere.
(FORBES)
