Benzinga | Nov 23, 2020 01:26AM EST

Alibaba CEO Calls China's New Fintech Regulations 'Timely And Necessary' After Ant IPO Ax

Alibaba Group Holding Ltd (NYSE:BABA) CEO Daniel Zhang said that Beijing's draft rules to prevent monopolistic behavior by China's internet platforms are "timely and necessary," Reuters reported Monday (Beijing time)

What Happened: Zhang, speaking at the World Internet Conference held in Wuzhen, China, said that the country's regulations need a shakeup.

The Chinese internet industry's "development and government supervision is a relationship that promotes and relies on each other, so that platform enterprises cannot only develop well themselves, but also serve the sustainable and healthy development of the whole society," the Alibaba CEO said.

The annual conference takes place on Nov. 23 and Nov. 24 and is organized by the Cyberspace Administration of China, the country's internet watchdog and censor.

China's internet giants such as Tencent Holdings Limited (OTC:TCEHY), Alibaba, and Meituan (OTC:MPNGF) are reportedly under greater government scrutiny.

Why It Matters: The draft rules, published Nov. 10, are aimed at preventing financial technology platforms from cornering the market or using methodologies to avoid fair competition, Reuters noted.

This month, Alibaba-backed Anti Group's IPO was halted temporarily just 48 hours before it was to take place.

Alibaba's founder Jack Ma and other executives were summoned by Chinese regulators ahead of the IPO for questioning, as per the Financial Times.

Financial stability and not allowing "entrepreneurs out of their lane" are thought to have been factors behind Beijing's move to suspend the IPO.

Ma had criticized China's bankers and regulators, which according to a Hong Kong professor is "unacceptable" to the ruling Chinese Communist Party.

Liu Qiang, vice president of Fosun Technology and Financial Group, said this month that Ant Group's IPO could still be the world's biggest. It was set to raise $37 billion before China's government intervened.

Price Action: Alibaba shares closed nearly 4.2% higher at $270.74 on Friday and gained 0.52% in the after-hours session.

Photo courtesy: Wikimedia