Global legal insights into the suspension of Ant Financial – opinion

While all eyes focusing on the US election, this week could have been an historic moment of triumph for China, as China’s fintech giant, Ant Financial, was awaiting the largest initial public offering in global history.Ant Financial, an affiliate of Alibaba Group, is little known to the Western audience, but serves over one billion users and eighty million merchants. Ant Financial (previously known as Alipay), was co-founded by Jack Ma and was scheduled to raise $34.5 billion, valuing the company at over $313 billion in a dual listing at the Shanghai and Hong Kong stock exchanges. Two days prior the IPO, Jack Ma was summoned for an urgent meeting with China’s regulators who advised of the suspension of the listing.Since the Shanghai regulators provided only a one-line explanation notice, little is known about the causes for the abrupt, embarrassing halt. Nonetheless, there is a lot that can be learned from the incident regarding the challenges of doing business in China. This lesson is especially important for foreign investors.The challenge of “crossing the river by feeling the stones,” a saying attributed to China’s former paramount leader Deng Xiaoping, is a metaphor describing China’s approach toward reform. This dance tactic requires in-depth cultural and political sensitivity, which is the main hurdle for foreigners doing business in China. Jack Ma, a native Chinese, is an all-star in China and an admired iconic figure with notoriety similar to Bill Gates and the late Steve Jobs. Ant’s anticipated IPO has caused clashes with China’s conservative regulatory bodies. While Jack Ma is pushing towards use of fintech, blockchain and big data, the regulators insisted on traditional financial backing. In a financial summit that took place in Shanghai days before the IPO, Jack Ma delivered a speech criticizing the conservative leadership. An open critic on the regulators is not the common practice in China, which may have contributed to the suspension. One of the key cultural issues in China is the virtue of saving face, which means giving the utmost respect to your counterparts even if they are wrong. This is crossing the river by feeling the stones.Amit Ben-Yehoshua is licensed to practice law in Israel and California, and served as the vice chair of the China Committee of the American Bar Association. He can be reached at and

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