Ant Group IPO may be delayed by six months

Ant Group's initial public offering to raise $37 billion could be delayed by at least six months and its valuation sharply reduced after the Chinese government intervened and halted its trading debut this week, according to the Financial Times.

A senior central bank official said on Friday that the decision to suspend Ant Group’s planned IPO was based on a comprehensive consideration about safeguarding the interests of financial consumers and investors.

“The decision was made in accordance with laws and regulations ... and about maintaining stable, healthy market development in the long term,” Liu Guoqiang, deputy governor of the People’s Bank of China, told reporters.

At the media briefing, Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission, echoed Mr Liu's view.

“The CBIRC also supports this decision made by the Shanghai Stock Exchange,” Mr Liang said. “Any listed company must comply with the requirements of relevant laws and regulations. We encourage the financial sector to explore reasonable innovation while putting risks under control,” Mr Liang told reporters.

“At the same time, we will regulate FinTech in accordance with its nature of finance, and include all financial activities into the regulatory framework.”

Shares of China’s biggest financial technology group were due to begin trading in Shanghai and Hong Kong on Thursday. But the Shanghai Stock Exchange suspended what was touted to be the world’s largest IPO on Tuesday night after founder Jack Ma was called in for “supervisory interviews” by related agencies.

China’s regulators warned that Mr Ma’s firm faces increased scrutiny and will be subject to the same restrictions on capital and leverage as banks. Mr Ma, Ant’s billionaire co-founder, was summoned to a rare joint meeting on Monday with the country’s central bank and three other top financial regulators.

Lawyers involved in Ant's listing said the company would have to respond to Chinese regulators' demands and submit a new IPO prospectus in Hong Kong, which could take at least six months, the Financial Times reported.

We encourage the financial sector to explore reasonable innovation while putting risks under control

The draft regulations could weigh heavily on Ant’s lending business, which drove about 40 per cent of its sales in the first half, and have an impact on the company’s valuation.

The rules require internet platforms to provide at least 30 per cent of the funding of their loans and to cap loans at Rmb300,000 ($44,843) or a third of a borrower’s annual salary, whichever is lower. Currently, Ant funds only 2 per cent of its total loans with the rest coming from other sources such as banks.

Based on estimates that Ant has Rmb1.8tn ($271bn) in consumer loans outstanding, research company Morningstar calculates it will have to hold Rmb540bn in loans on its balance sheet.

Market experts said the FinTech company may have to alter its business models to keep up with the regulations.

The new rules could make Ant's business model more like a bank, a sector that is highly regulated, cited Financial Times, quoting investors. It could also leave Ant's balance sheet more exposed in the event of loans turning sour.

The value of Ant depends on the extent to which [the] new rules are implemented

“The value of Ant depends on the extent to which [the] new rules are implemented,” said a Shanghai-based fund manager who subscribed to Ant’s IPO. “If they get strictly carried out, Ant would be worth less than half of what it is now.”

Sources Financial Times spoke to claim that there are some hopes within Ant that there could be changes to the draft regulations, including the requirements on funding.

The FinTech company’s IPO would have given it a market value of about $315bn based on filings, bigger than JPMorgan Chase and four times larger than Goldman Sachs Group.

The IPO had attracted at least $3 trillion of orders from individual investors for its dual listing in Hong Kong and Shanghai.

Ant said following the meeting with regulators that it will “implement the meeting opinions in depth” and follow guidelines including stable innovation, an embrace of supervision and service to the real economy.

The Hangzhou-based company, a 2010 offshoot of e-commerce giant Alibaba, dominates China’s payments market via the Alipay app. It also runs the giant Yu’ebao money market fund and two of the country’s largest consumer lending platforms. Other businesses include a credit scoring unit and an insurance marketplace.

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Our legal columnist

Name: Yousef Al Bahar

Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994

Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

How to wear a kandura

Dos

Wear the right fabric for the right season and occasion
Always ask for the dress code if you don’t know
Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
Wear 100 per cent cotton under the kandura as most fabrics are polyester

Don’ts

Wear hamdania for work, always wear a ghutra and agal
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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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7.30pm: Handicap (PA); Dh100,000; 2,400m