U.S. should try to delay IPO of China's Ant Group, says Senator Rubio

From Alexandra Alper
WASHINGTON (Reuters) - Senator Marco Rubio, who successfully urged the Trump administration to continue investigations into Chinese companies, on Friday urged the U.S. government to consider options to launch an IPO for China's Ant Group, the fintech arm of Chinese e, to delay trading company Alibaba <9988.HK>.
"It is outrageous that Wall Street is rewarding the Chinese Communist Party's overt crackdown on Hong Kong's freedom and autonomy by coordinating the Ant Group's IPO on the Hong Kong and Shanghai stock exchanges," Republican Rubio said in a statement to Reuters.
"Management should seriously consider the options available to delay the Ant Group IPO," he added.
The Hong Kong IPO portion is sponsored by China International Capital Corp (CICC) <3908.HK>, Citigroup <C.N>, JPMorgan <JPM.N> and Morgan Stanley <MS.N>. Credit Suisse <CSGN.S> works as a joint global coordinator. Goldman Sachs <GS.N> is also involved.
Ant did not immediately respond to a request for comment.
It wasn't immediately clear how the US government could postpone the listing of a Chinese company overseas. But Rubio's remarks are a sign of mounting pressure among Chinese hardliners in Congress, within the government and elsewhere for President Donald Trump to sanction Ant before he is listed later this month.
Some fear that the offer, valued at up to $ 30 billion, could expose numerous US investors to fraud. Others fear that the Chinese government could gain access to sensitive banking information of US citizens.
"These digital payment systems are the source of legitimate national security concerns and the Trump administration should endeavor to protect the sensitive financial information of American users as soon as possible," Republican Congressman Jim Banks said in a statement when asked if the administration doing so should impose sanctions on the company.
Ant is China's leading mobile payments company, providing loans, payments, insurance and asset management through mobile apps. Ant is based in the east China city of Hangzhou and is 33% owned by Alibaba Group Holding Ltd and controlled by Alibaba founder Jack Ma.
An anti-China advocacy group known as the "Current Peril: China Committee," which includes hedge fund manager Kyle Bass, wrote a letter to Trump last month calling for the company to be blacklisted and to put the initial public offering will be late.
"We believe that the IPO should at least be delayed to ensure that ... disclosures are made correctly and properly valued, as unfortunately a significant portion of the IPO proceeds will almost certainly end up in the investment portfolios of millions of companies American retail investors, "the group said in the September 14 letter.
The company could become the latest victim of a year-long technology battle between Beijing and Washington, in which the Trump administration cracked down on Chinese companies like telecommunications giant Huawei and surveillance camera maker Hikvision, ranging from intellectual property theft to sanctioning and human rights violations.
Rubio was the first to publicly request an investigation into the popular Chinese social media app TikTok by a powerful national security committee to review it. The administration ultimately banned the app, but a court order pending review prevented it from taking effect.

(Reporting by Alexandra Alper; editing by Paul Simao, Grant McCool and Sonya Hepinstall)

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