Mainland probe delays approval for Ant's IPO: report

China's securities regulator is probing a potential conflict of interest in fintech giant Ant Group's planned US$35 billion stock listing, delaying approval for what could be the world's largest IPO, three people with direct knowledge of the matter said.

The China Securities Regulatory Commission (CSRC) is looking into the role of Alipay, Ant's flagship payment platform, as the only third-party channel through which retail investors could buy into five Chinese mutual funds investing in the IPO, the people told Reuters, speaking on condition of anonymity.

The arrangement sidelined banks and brokerages, the traditional route for retail investors to buy into funds. More than 10 million retail investors piled money into the five mutual funds when they were launched in late September, underscoring the marketing clout of Alipay.

The CSRC said in guidelines effective from October 1 that mutual fund distributors should avoid conflicts of interest form selling products related to their other existing and potential businesses.

The people said the probe was unlikely to derail the IPO, although it was unclear what its outcome might be.

It has already delayed Ant's plans, however, as the company had hoped to get CSRC approval last month, and it has narrowed the window for the IPO ahead of the November 3 US presidential election, which could fuel uncertainty for global markets.

Ant declined to comment. The CSRC didn't immediately respond to a request for comment.

Ant, a domestically incorporated affiliate of Chinese e-commerce behemoth Alibaba, is seeking a dual-listing in Shanghai and Hong Kong as soon as this month, and needs CSRC approval for both listings.

The delay in CSRC approval has forced Ant to postpone a hearing with the Hong Kong stock exchange, the last part of the approval process for the Hong Kong listing, the people said.

(Reuters)