The blocked listing of Ant Group was driven by more than just concerns by the central government against its founder Jack Ma but also its shareholders which include prominent figures in mainland Chinese politics.

In addition to Ant Group’s clout in the financial system and Jack Ma’s infamous «pawn shop» speech, the blocked listing was motivated Beijing’s worries about the fintech firm’s complex ownership structure and its ultimate beneficiaries, according to a «Wall Street Journal» report citing dozens on unnamed Chinese officials and government advisors.

Investigations into Ant’s ownership structure had already kicked off before his Ma’s speech in Shanghai.

«On one hand, you got a bunch of individuals potentially amassing large amounts of wealth,» said one of the sources familiar with the probe. «Then on the other hand, much of the risk has been transferred to the state side.» 

Jiang Zhicheng

One of the key investors that caused concern for Chinese authorities is Jiang Zhicheng is the grandson of the former Chinese leader Jiang Zemin – still a key figure in Chinese politics with many of his allies purged by Xi Jinping's anti-corruption campaign. 

The younger Jiang is the founder of private equity firm Boyu Capital which, according to the report, set up a Shanghai subsidiary that invested in a firm that then invested in another private equity firm, Beijing Jingguan Investment Center, which was the ultimate owner of Ant shares. Beijing Jingguan has nearly a 1 percent stake in Ant Group though the prospects does not mention Boyu’s involvement. 

Ma’s ties with the younger Jiang date back to at least 2012 when the Harvard-educated princeling helped negotiate a deal to buy out half of Yahoo’s stake in Alibaba.

Li Botan

Another shareholder also tied with Jiang’s network – oft-dubbed as the «Shanghai faction» – is Beijing Zhaode Investment Group and its controller Li Botan, son-in-law of Jia Qinglin who is a former member of the Politburo Standing Committee.

Political leanings aside, Li was targeted by Xi during his anticorruption campaign over his renowned establishment of the Maotai Club in 2009 – a private club in Beijing that is frequented by princelings and their patrons for their lavish banquets.

Other prominent shareholders include real estate developer and disgraced peer-to-peer fundraiser Wang Xiaoxing; property tycoon Lu Zhiqiang; online gaming firm Giant Interactive’s chairman Shi Yuzhu; and Fosun International co-founder Guo Guangchang.

Pre-IPO Moves

According to the report, Ma was already making attempts to fend of increasing regulatory pressures prior to the IPO pullout. He added major strategic investors such as the mainland’s national pension fund, large insurers and sovereign wealth fund China Investment Corporation. He had also planned to list on the Shanghai-based tech bourse STAR Market in an effort to please Beijing. 

But Ant’s listing was ultimately blocked and the report underlined that this was because «Xi had little interest in having the [IPO] funnel enormously lucrative financial stakes to well-known Chinese princelings».

Vetting by Regulators

Moving forward, Ant’s key shareholders, senior managers and directors expected to be vetted by mainland financial regulators who will review their qualifications and sources of capital.

Completion of Ant’s structuring will take some time, the sources added, and the revival of its IPO is «not within the scope of the high-level government agenda right now».