The Shanghai Stock Exchange has suspended the IPO of the Ant Group, the spin-off from the internet finance company of the Chinese e-commerce giant Alibaba. This was an extraordinary twist on what is expected to be the biggest stock sale in history.
In a notice to Ant posted online late Tuesday, the exchange said the company's proposed offer may not qualify for listing after Chinese regulators said the company's executives, including Jack Ma, co-founder of Alibaba, who is also Ant's majority shareholder, for a meeting on Monday.
Neither the regulators nor Ant said in detail what was discussed at the meeting. However, the timing of the rendezvous, which occurred just days before the anticipated simultaneous trading of Ant shares in Shanghai and Hong Kong, suggested a discord with the company or with Mr. Ma.
Shortly after the Shanghai Stock Exchange made the announcement, Ant said it would suspend part of its Hong Kong listing as well. Ant didn't immediately have another comment.
Over the past decade, Ant has changed the way people in China handle money. The company's Alipay app has become an everyday payment tool for hundreds of millions of smartphone users and is a platform for receiving small loans and purchasing insurance and investment products.
In doing so, Ant has questioned the dominance of China's state banks and other institutions that have long had a privileged place in the country's financial and political system. Regulators have been wary of Ant's rapid growth in certain areas, fearing that if it collapses, it could get too big to save.
Ant turned in response. Instead of primarily using its own money on lending, the company is now effectively acting as an intermediary for banks, introducing them to individual borrowers and small businesses that they might otherwise not reach.
This business model obviously works well for many of Ant's investors. The dual I.P.O. had been set at at least $ 34 billion. The company's market valuation after listing around $ 310 billion would make it worth more than many global banks.
However, the company's future remains at the mercy of Chinese regulators, whose views on the merger of technology and finance are still evolving.
"Regulators have thought long and hard about the risks in this area and how it should be regulated, but at that particular point it all comes out," said Yu Baicheng, director of Zero One Research Institute, a think tank in Beijing on finance and Technology. "It's definitely a statement about the attitude of the regulators."
Ant's chairman, Eric Jing, and his chairman, Simon Hu, also attended Monday's meeting with regulators. "Views on the health and stability of the financial sector were exchanged," Ant said in a statement, adding that the company "had an obligation to thoroughly implement the views of the meeting".
As a further sign of ongoing scrutiny, the country's banking regulator, the Chinese banking and insurance regulator, issued new draft rules for online microfinance transactions on Monday. This included higher capital requirements for loans and tighter controls on lending across provincial borders.
Bai Chengyu, an executive with the China Association of Microfinance, said the new rules could cause the entire microfinance industry to shrink.
Mr Ma did not ingratiate himself with the authorities when he said in a recent speech in Shanghai that financial regulators' excessive focus on risk mitigation could stifle innovation.
"We can't manage an airport like a train station," he said. "We cannot use yesterday's methods to steer the future."
The head of consumer protection at China's banking regulator, Guo Wuping, hit back on Monday and named two popular features in Alipay in a harshly critical article in the 21st Century Business Herald, a state newspaper.
Mr. Guo argued that online financial products are not fundamentally different from traditional ones and that financial technology companies should therefore be regulated in the same way as established institutions.
Huabei, a credit facility in Alipay, is no different from a credit card issued by a bank, Mr. Guo wrote. And Jiebei, an Alipay loan feature, is no different from a bank loan. Ant has named Huabei and Jiebei as the most widely used consumer credit products in China.
Loose regulation has allowed financial technology companies to charge higher fees than banks, Guo wrote. This has resulted in some low-income people and young people falling into debt traps, which ultimately harms consumer rights and interests, and even endangers families and society.
Ant declined to comment on Mr. Guo's article.