WASHINGTON—Ant Technology Group launches its initial public offering (IPO) with a record share sale this week amid concern over national security and the company’s involvement in human rights abuses.
The fintech giant, headquartered in Hangzhou, Zhejiang Province, is the parent company of Alipay, China’s largest digital payment platform.
Ant Group, formerly known as Ant Financial, has attracted substantial interest from U.S. investors. While the company won’t be listed in New York, Americans will be able to invest in the company once its shares are included in emerging markets and international indexes. Most exchange-traded funds and other investment vehicles will hold Ant shares as they benchmark their performances against these indexes.
Ant and its affiliate Alibaba have also been accused of playing roles in severe human rights abuses in China.
Reuters earlier reported that the Trump administration considered putting Ant Group on a trade blacklist known as the “Entity List” due to national security concerns. Being on a trade blacklist would restrict U.S. companies from doing business with the Chinese fintech company.
However, several sources who wish to remain anonymous have told The Epoch Times that there's been a disagreement within the administration over blacklisting Ant Group ahead of its IPO, because of concern that such action could disrupt the U.S. and global financial markets.
The Trump administration officials are instead working on a “broader initiative” to interdict certain transactions involving Chinese stocks, including Ant, a person familiar with the matter told The Epoch Times.
“It certainly does implicate the capital markets in the United States,” the person said, calling it a “pretty big deal.”
The Treasury Department declined to comment to The Epoch Times on the matter.
“I think it's fair to say that the administration is not backing away from taking on China in the U.S. capital markets for perceived corporate bad actors,” the source said.
The action could be in the form of two executive orders, with the first one being announced within weeks, the person said.
The White House, Commerce Department, and the State Department didn't immediately respond to requests for comment.
With the record IPO pricing, Ant Group would be valued at $313 billion, larger than some of the largest U.S. banks, including Bank of America and Wells Fargo.
A Decade-Long ProblemThrough public pension and retirement funds, millions of Americans own stocks in China-based companies that don't comply with U.S. laws, a problem that has been overlooked for more than a decade. Some of these companies are involved in mass surveillance of Chinese citizens or affiliated with the People’s Liberation Army.
The majority of U.S. investors are unaware of the identities of these companies and their activities. Investment prospectuses, legal documents issued by companies during stock offerings, don’t disclose these potential risks to U.S. investors.
A working group appointed by President Donald Trump on Aug. 6 released a new plan addressing risks posed by U.S.-listed Chinese companies. Under the plan, U.S. regulators would require all listed companies including Chinese to come into compliance with the U.S. standards by Jan. 1, 2022.