Ant IPO investors fails in court bid to freeze $320m

The High Court denied an investor's request to continue freezing the HK$320 million that he paid to an asset management firm and a fund to subscribe to Ant Group's new shares.

Plaintiff Cheng Siu-fai, who has the same name as Aoyuan Healthy Life's chief financial officer, asked for an extension of the interim injunction order that prohibited the asset management firm and the fund from drawing down the funds in the related accounts.

The judge turned down Cheng's request as the defendant promised to lodge the HK$320 million with the court.

The defendants include Swenson Global Opportunities Funds, Swenson Asset Management, Chan Sai-wing and Edward Sin Kin-hong. Chan Sai-wing is a responsible officer of Swenson Asset Management and Edward Sin a former CFO at prefabricated construction firm China Saite.

Cheng agreed to invest HK$320 million in October in a fund under Swenson to subscribe to Ant's new shares, according to the writ. However, after Ant put a hold on a dual listing in Hong Kong and Shanghai Swenson refused to refund the money to Cheng as Swenson allegedly aimed the funds were used to acquire 3.8 million existing Ant shares.

Cheng accused Chan and Edward Sin of fraud or misrepresentation and wants a court-ordered refund.

The Shanghai Stock Exchange pulled the plug on what could have been the world's largest ever initial public offering two days before the scheduled debut on November 5. That prompted Ant Group to put on hold the Hong Kong part of the listing.

The dramatic turn came after Jack Ma Yun and other top Ant Group executives were summoned to a meeting on November 2 with the central bank and securities, banking and foreign exchange watchdogs.

And China's financial regulators had issued draft rules to tighten their grip on online micro-lending.

Apart from a failure to meet regulatory requirements, market watchers have put forward many theories on why Beijing abruptly pushed back what could have been the biggest-ever share offering.

One of the most advanced is that Ma was on a collision course with regulators.

The offering would have raised around HK$264 billion in total and attracted 6.7 million people to place about HK$23.6 trillion for shares.