Ant bite dragon dragon swat ant

Ant bite dragon dragon swat ant

The Ant stumbled as the fiddling grasshopper changed his tune. What was slated to be the world’s largest initial public offering (IPO) turned into an embarrassment for China’s tech champion, Alibaba founder Jack Ma, as his Ant Group IPO was suspended days before its scheduled date.

However, it is a bigger loss of face for the Chinese politico-economic system, in the eyes of the global investor community. Ant Group’s last-minute postponement of its vaunted mega-IPO signals not regulatory prudence or consumer protection but the fickle arbitrariness of Communist Party mandarins, who hold sway over matters big and small in China.

India’s regulatory system is stable and predictable, by comparison. On the face of it, the Ant Group IPO schedule overlapped with the introduction of new regulatory norms for consumer loan companies; new rules notified are open for comment and will be finalised only on December 2, and it made sense for the Ant Group IPO to proceed only after it had complied with the new norms.

Ant, at present, utilises its technological prowess to analyse 3,000 data points to arrive at a decision on an application for credit and collects a fee from the bank that actually makes the loan.

It carries on its own books only 2% of its 2.1 trillion yuan value of its loans to consumers and small businesses, the bulk being outsourced to banks or securitised and sold.

New regulations propose that lenders will have to hold 30% of their credit on their own books. Plus, Ant will need to apply for new licences and raise additional capital. Since such detailed regulatory proposals do not clump together in a moment of regulatory epiphany and must have been a work in progress when Ant was taking approvals for its mega IPO, it is rather strange that the regulators did not tell a national champion to hold his IPO till the rules were out and compliance achieved.

Jack Ma criticised regulators for their archaic approach towards tomorrow’s tech, in the presence of senior party officials, on October 24. No one is above the party, shows Ant’s pulled IPO.