According to an exclusive report by Reuters on October 15, two people familiar with the matter revealed that the US State Department has submitted a proposal to the Trump administration. It is required that Ant Group be included in a “trade blacklist” before it goes public.
The report pointed out that on this occasion, the Trump administration is trying to send a signal to prevent American investors from participating in Ant Group’s initial public offering (IPO).
Earlier news reported that Ant Group plans to go public in Hong Kong and Shanghai, China, as early as October. The latest statement of Ant Group stated that its listing process is proceeding in an orderly manner in both places, but there is no preset timetable.
The market value of Ant Group’s listing in Shanghai and Hong Kong is expected to be the world’s largest IPO this year. It is expected to raise 35 billion US dollars, and then the company’s valuation may rise to 250 billion US dollars.
As for the Trump administration officials’ reasons for targeting the Ant Group, it is still the old-fashioned “national security” concern, claiming that the Ant Group may allow the Chinese government to access sensitive bank data of American users.
The so-called “entity list” will make it difficult for American companies to sell high-tech products to companies that have been blacklisted. This has become the Trump administration’s preferred method to suppress Chinese companies, but the actual impact of this method is sometimes doubtful.
In May last year, the United States included Huawei in the “Entity List” and prohibited US companies from selling related technologies and products to Huawei, which dealt a blow to Huawei. However, the report pointed out that if the United States took the same action against Ant Group this time, the impact may be even more symbolic.
Last weekend, U.S. Republican Senator Rubio, who has long discredited China and advocated “blocking” Chinese high-tech companies, also issued a statement encouraging the Trump administration to “consider seriously the option to postpone Ant Group’s IPO.” The report pointed out that these various signs indicate that the Trump administration is under increasing pressure on the ant group to take action.
It is not clear when the US government agency that has the authority to decide whether to include a company on the “entity list” will review the matter.
The U.S. State Department and Ant Group did not respond to this matter, but Ant Group emphasized in a recent statement to Reuters that the company’s business outside China accounts for only 5%.
Reuters believes that Trump’s polls lag behind his opponent, the Democratic candidate Biden. The latest measures to suppress China this time took place before the presidential election, and that Trump has made tough on China an important foreign policy tool.
China International Capital Corporation, Citigroup, JPMorgan Chase, and Morgan Stanley have all participated in the Hong Kong IPO of Ant Group. Credit Suisse Group serves as the joint global coordinator of the matter, and Goldman Sachs is also involved.
Reuters reported earlier that an investigation by the Chinese securities regulatory agency had delayed Ant Group’s IPO. In response to this, Ant Group responded, “The listing process of Ant Group is proceeding in two places in an orderly manner. We do not have a preset timetable, and any guesses about the timetable have no factual basis.”