Sources have confirmed that chinese authorities are probing the speed with which Ant Group Co.’s ill-fated listing was approved.
The investigation, being carried out by officials from multiple agencies, has for several months inquired into the process by which China’s securities regulator approved the public offering.
Among questions being explored by the probe are why Ant’s IPO was fast-tracked, if the company made sufficient disclosures and whether it received preferential treatment in the allocation of its stock code.
The Wall Street Journal, which reported the probe earlier, said Beijing was also looking into what support local officials provided Ant and into big state-owned firms that stood to gain from a listing of Jack Ma’s financial technology giant.
The scrutiny points to the continuing fallout from the abrupt suspension of Ant’s initial public offering, days before a trading debut in Shanghai and Hong Kong last year.
The derailment of what was slated to be the world’s largest IPO marked the start of a sweeping crackdown by Beijing on China’s celebrated financial technology giants, which authorities have pledged to rein in this year.
Founder Jack Ma has since kept a low profile, with regulators directing Ant to drastically revamp it business and hitting his crown jewel Alibaba Group Holding Ltd. with a record $2.8 billion fine for abusing its market dominance.
Ripples from the debacle are also being felt at China’s regulatory bodies. The securities watchdog last week unveiled plans to ban former staff from investing in pre-IPO companies.
Chinese leaders are also concerned that Ant’s IPO stood to benefit a swathe of well-connected individuals and institutions, including state funds such as sovereign wealth fund China Investment Corp. and insurer China Life Insurance Co., the Wall Street Journal reported.