Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

For some Ant investors, outrage that regulatory risks weren't flagged better

Stock MarketsNov 05, 2020 05:50AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: A thermal imaging camera is seen in front of a logo of Ant Group at the headquarters of Ant Group, an affiliate of Alibaba, in Hangzhou

By Scott Murdoch and Kane Wu

HONG KONG (Reuters) - Some professional investors who bought Ant Group stock in its $37 billion IPO are fuming that regulatory risks were not better flagged, especially given they had to jump through hoops to participate in the fintech giant's tightly managed roadshow.

China's suspension of the world's biggest float came at the eleventh hour after authorities published a consultation paper on Monday that recommended tighter rules for online micro-lending companies - which if implemented will require changes to Ant's business model and hit its growth prospects.

Ant (SS:688688) (HK:9988) did make disclosures about major regulatory risks in China in its prospectus and investors are expected to factor in a degree of regulatory uncertainty when making investments.

However, some fund managers who bought stock in the IPO say Ant did not do enough and they wonder how it could not have known that tighter regulations were in the offing.

"There was no mention of microlending regulation tightening, that (was) not a conversation that was had," one hedge fund manager in Hong Kong said of the roadshow.

"I don't think (investors) thought it was an issue until the there was a last minute discussion paper from the regulators," he added. Like many investors, he declined to be identified as he was not authorised to speak to media.

Ant said in a statement to Reuters it was not aware of the details of the draft on online micro-lending rules until it was published on Nov. 2.

"Since Ant executives were unaware of the draft online micro-lending rules, they were not the subject of any road show calls," the statement said.

Fund managers also expressed annoyance that Ant founder Jack Ma publicly criticised financial regulations as stifling innovation last month - a tactless move that many observers believe pushed regulators to suddenly ambush the Hong Kong and Shanghai dual listing.

"It strikes me that this issue could have been dealt with a long time ago. It seems that Jack Ma is being schooled in front of the class for the speech he made last week," another hedge fund manager in Hong Kong said.

For some investors, the lack of detailed discussion on regulatory risk was particularly galling given what they say were unprecedented demands made by Ant in order for them to be allowed to participate in the roadshow, and its tight control over topics discussed.

Questions during the roadshow calls - all online due to the pandemic - had to be submitted beforehand and Ant's management chose which ones they answered, multiple sources told Reuters.

One fund manager also said he had to lodge documents outlining how the firm valued Ant, the length of time they intended to hold the stock and present staff biographies for team members taking part in the call. Another said he was required to complete a one page document on the positives he liked about Ant.

An Ant representative said the claims were untrue and it had not made such requests of fund managers during the roadshow.

While some investors were upset, others, who also bought Ant stock, were not, saying the complaining reflected a lack of due diligence.

"The question for other asset managers is why were you putting in billion dollar orders if you hadn't done this homework and now feel this way?," said a London-based fund manager.

He said he was able to ask questions on the roadshow, adding that he had a good "independent understanding" of the regulatory framework that did not rely on input from Ant management.

Sam Lecornu, co-founder of Stonehorn Global Partners (NYSE:GLP) in Hong Kong, added he was not as surprised as others by the suspension.

"The risks were disclosed very clearly for the people who took the time to read them. We still have our belief that the management can navigate risks like this now and into the future."

For some Ant investors, outrage that regulatory risks weren't flagged better

Related Articles

Quilter reports strong Q4 2021 results
Quilter reports strong Q4 2021 results By Reuters - Jan 26, 2022

LONDON (Reuters) - Fund manager Quilter saw a strong final quarter of 2021, with improved year-on-year net flows, it said in a trading statement on Wednesday. Assets under...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email