Chinese e-commerce major JD.Com Inc’s (NASDAQ: JD) fintech unit, JD Technology, will likely withdraw its IPO application on Shanghai’s technology-heavy Star Market amidst China’s widespread crackdown on the extensive online finance industry.
The company, previously known as JD Digits and JD Finance, pulled its public listing application on March 30, according to a statement posted on the Shanghai Stock Exchange website on Friday.
The IPO withdrawal came a day before JD.com completed a reorganisation that transferred its cloud computing and artificial intelligence operations as well as other assets worth 15.7 billion yuan (US$2.4 billion) to JD Technology.
JD Technology was earlier said to be rethinking its IPO plans according to a report by the South China Morning Post, citing two sources briefed about the discussions who declined to be named. The report said the fintech company planned to pull out its application and resubmit it at a future date.
The withdrawal has come amid sweeping regulatory changes in China’s financial technology sector, which resulted in authorities halting the US$35 billion IPO in Hong Kong and Shanghai by Ant Group just 48 hours before trading was expected to start in November last year.
Regulators have since published a slew of new rules covering financial services offered by internet platforms and technology companies to guard against certain financial risks.
In January, JD Technology named Li Yayun as its new chief executive, replacing Chen Shengqiang. Li, who served as JD.com’s chief compliance officer and the Communist Party secretary in the company, had never been in charge of a business unit before.
