China on Tuesday suspended the stock market listing of billionaire Jack Ma’s Ant Group, days ahead of the financial technology company’s debut on the bourses, reported Bloomberg. The Ant Group, backed by Ma’s e-commerce platform Alibaba was set for an initial public offering worth $35 billion (more than Rs 2.61 lakh crore), the world’s largest so far, on Thursday, on the Shanghai stock exchange.

In a statement released on Tuesday, the Shanghai stock exchange said that it will suspend the listing after Ma was called in for “supervisory interviews” by related agencies. As a result of the development, Ant Group also had to freeze its dual listing on the Hong Kong stock exchange.

Earlier on Monday, Ma and his top executives were called in for a meeting with China’s financial regulators and told that Ant Group’s lucrative online lending business would face tighter scrutiny, Reuters reported quoting unidentified officials. Citing this meeting, the Shanghai stock exchange in its statement said that the company may “fail to meet the issuance and listing conditions or information disclosure requirements”.

As a result of the suspension in listing, Ma’s holding company Alibaba Group’s shares plummeted in the New York and Hong Kong stock exchange by up to 8.1% and 9.3%, respectively, resulting in a decline of $3 billion (more than Rs 22,300 crore) in the Chinese tycoon’s wealth.

Ant became too big for its own good: Analysts

Analysing the development, financial market experts suggested that Ma’s venture had bitten off more than it could chew in the Communist-ruled China.

“The Communist Party has shown the tycoons who’s boss,” Francis Lun, Chief Executive Officer of GEO Securities told Reuters. “Jack Ma might be the richest man in the world but that does not mean a thing.”

“The way I would read it, it is a deliberate public relations move,” Sean Darby, Chief Global Equity strategist at Jefferies, told Bloomberg. “This has happened before when companies appear to have become too big versus the state for the authorities’ liking.”

According to Reuters, analysts interpreted the move as a slap down for Ma, who had wanted Ant to be treated as technology company rather than a highly regulated financial institution. Beijing had become uncomfortable with banks increasingly using micro-lenders or third-party technology platforms such as Ant for underwriting loans amid fears of rising defaults and a deterioration in asset quality in a pandemic-hit economy, according to its report.

What next?

Analysts quoted by Reuters and Bloomberg suggest that company will have to make changes that include capital increases at its micro-lending units and will have to apply again for licences for the units to operate nationwide. Unnamed officials told the news agencies that the market listing may be delayed by as much as six months.