According to Reuters, the regulatory authorities have ordered state-owned companies to give information on their equity investments, asset-backed securities exposure, and Ant group loans.

The move made a wave of sell-off Alibaba shares on Tuesday as Alibaba held 1/3 shares in Ant Group. Alibaba Group shares dropped 5.3 percent before finishing with a 3% loss at 111.4 Hong Kong dollars (14.27 dollars).

Francis Chan, banking & fintech analyst from Bloomberg Intelligence, said, “Beijing’s call for China’s banks to check their exposures to Jack Ma’s unlisted Ant Group may jeopardize the company’s ties with financiers for its online-loan business, with our scenario analysis suggesting its valuation could plunge to $63 billion vs. the $320 billion level targeted in the 2020 IPO.”

Last month, China Cinda Asset Management Co Ltd backed out of a plan to buy a 20% share in Ant Group’s consumer financing unit worth 944 million dollars.

Reuters cited a secret source saying that Cinda, one of China’s four largest state-owned asset management organizations, did it due to pressure from state regulators.

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