China’s Ant Group, controlled by billionaire Jack Ma, is facing growing scrutiny for offering retail investors access to its $30 billion share sale through an exclusive arrangement on its own mobile payments app, reported the Financial Times.
Under the deal, investors bought exposure to the initial public offering — expected to be the world’s largest — through five funds that were exclusively allocated a portion of the company’s shares. Ant’s Alipay mobile phone application was the sole third party distributor of the funds, said the FT.
“Is there a conflict of interest? Clearly there is,” said Peter Alexander, managing director at Z-Ben, a Shanghai-based consultancy, of Ant’s arrangement with the fund managers. “From an ethical standpoint you’re using your own platform to raise money from your clients to invest in your own company.”
In response to questions from the Financial Times, Ant said details about the funds had been “fully disclosed”, and that it was not underwriting its own IPO. “The newly established mutual funds that participated in Ant Group’s IPO as strategic investors . . . have been operating independently,” it said.