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Reuters Cinda, one of the four biggest state-owned asset management companies in China, announced the scrapping of the planned Ant investment on Thursday, without elaborating on the reason.
China Cinda Asset Management (1359) scrapped a deal to buy a 20 percent stake worth about US$944 million (HK$7.36 billion) in fintech giant Ant Group's consumer finance arm because of pressure from state authorities, people with knowledge of the matter said.
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The decision could further delay a regulatory-driven revamp of Ant, an affiliate of Alibaba , and the revival of its public market debut after its US$37 billion dual-listing attempt was derailed at the last minute in November 2020.
Cinda's crucial capital injection into Ant was endorsed by its primary regulator - the China Banking and Insurance Regulatory Commission - but it failed to secure approval from higher government authorities, said two sources with direct knowledge of the matter.
One of the sources said China's State Council, its cabinet, was one of the authorities that questioned Cinda's bid to invest in Ant while the fintech firm's core business was still in the middle of restructuring, and finally rejected it.
The rejection was also triggered by concern that the deal could run counter to state AMC's direction of reform that requires asset managers to focus on their core business of disposal of soured loans, and the divesting of non-core assets, the second source said.