Last week, Cinda announced plans to scrap its plans, which would have seen it invest CNY6bn ($942.27m) in the consumer finance unit of Ant Group.
State-owned Cinda, which is one of the four largest asset management companies (AMCs) in China, did not elaborate on its move.
Notably, the China Banking and Insurance Regulatory Commission (CBIRC) encouraged Cinda’s investment into Ant. However, higher government authorities did not approve the deal, two sources told the publication.
Among those who disagreed was the cabinet of China’s State Council, which raised concerns as the restructuring of Ant was still ongoing.
Another reason cited by the source was that Cinda’s investment in Ant could go against state AMC’s direction that requires asset managers to focus on core operations and reduce non-core business.
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Cinda’s investment was part of CNY22bn ($3.45bn) funding in Chongqing Ant Consumer Finance that would have increased its capital from CNY8bn ($1.25bn) to CNY30bn ($4.71bn).
Others joining the round included Ant Group, Sunny Optics, Boguan Technology, Yufu Capital and Yuyue Medical.
Ant Group had set up Chongqing Ant Consumer Finance as part of the restructuring process to hold its consumer lending units Huabei and Jiebei.