China’s Long Reach

How did a Chinese regulator get a say in a Nigerian fintech’s IPO?

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China’s Long Reach

Photo by Cara Willenbrock on Unsplash

In November 2020, Jack Ma, the founder of Alibaba and one of China’s richest men, missed the final of Africa’s Business Heroes, a television contest he had created, in which African founders pitch for a share of $1.5 million in prize money. One contestant who had pitched to Ma in a previous round told the Financial Times she was starstruck.

In October, the organisers had confirmed Ma as one of the judges for a final set for November 13 and 14. It took place on November 28 and 29 without him; Ma’s seat on the panel went to Lucy Peng, an Alibaba executive. Busy executives often send someone in their stead, and most people would not have thought twice about it.

But the FT noticed that Ma’s photograph had been removed from the show’s judging page and that he had been cut from a promotional video. Alibaba said a scheduling conflict had kept Ma off the panel; asked about his whereabouts, a spokesperson said: “We do not have anything to add beyond that.”

Five weeks before the final, on October 24, Ma had told an audience of bankers and regulators in Shanghai that China’s banks had a “pawnshop mentality”, lending against collateral and guarantees when they could use data to decide who was good for the money.

Ma controlled Ant Group, the Hangzhou company behind Alipay, whose $37 billion listing on the Shanghai and Hong Kong exchanges was then the most anticipated in the world. Nine days after the speech, four regulators summoned Ma, along with Ant’s chairman and chief executive. An investment banker assured reporters that a supervisory interview was not a penalty and would not affect the IPO.

The following evening, the Shanghai Stock Exchange suspended the listing. Its notice cited the regulators’ interview with Ant’s actual controller, chairman and president, followed by a change in fintech regulation that Ant had reported. It was, at the time, an astonishing act. China was reaching into the heart of a deal already priced and allocated to stop it. It would not be the last time.

When Ma next appeared in public, on January 20, 2021, it was in a short video greeting rural teachers. He was now a ghost in his empire, and a cautionary tale to anyone who thought a foreign passport or foreign listing meant they were beyond Beijing’s reach.

On October 30, OPay rang the opening bell on the floor of the New York Stock Exchange to celebrate an IPO set to raise $304 million at a $4 billion valuation. Hours later, the company abruptly pulled the offering, citing an inquiry relating to a jurisdiction it described as “immaterial” to its business.

Bloomberg and Semafor later reported, citing people familiar with the deal, that the inquiry came from a Chinese regulator. From its headquarters in Singapore, OPay operates a business that earns most of its revenue in Nigeria and, according to its prospectus, has no operations in mainland China. Bloomberg’s sources pointed to Zhou Yahui, its founder and largest shareholder, as its link to China.

A Lawyer’s Opinion

When Alibaba listed in New York in 2014, its lawyers at Fangda Partners advised that China’s securities regulator need not sign off on the offering, though the prospectus, with the nervous precision of counsel who have read the room, conceded that the regulator might one day read the rules differently. The company raised $25 billion on the strength of that opinion.

The ride-hailing group Didi went public in New York on a Wednesday in June 2021; by Friday, China’s internet regulator had opened a cybersecurity review and ordered it to stop signing up new users. A year later, the regulator ruled that Didi had processed data in ways that seriously endangered national security and had gone through the motions of complying with its instructions. The fine was RMB 8.026 billion — roughly $1.1 billion at current exchange rates. Cheng Wei, the chairman and chief executive, and Liu Qing, the president, were fined RMB 1 million each, about $139,000 apiece.

Beijing then changed its rules, and from March 2023, a company incorporated abroad could still be deemed Chinese for the purposes of selling shares overseas. The securities regulator, the CSRC, applies two tests. First, mainland companies must account for 50% or more of a company’s operating revenue, total profit, total assets or net assets. Its main operations or principal offices must be on the mainland, or most of the senior managers running it must be Chinese citizens or ordinarily resident there. A company that meets both tests must file with the CSRC before it can list abroad.

Consider the strange case of Zhong Guo Liang Tou, a food company from Heilongjiang whose Chinese name translates to "China Grain Investment Group." In its American filings, it went by China Food Investment. It sought a Nasdaq listing through a merger with a shell called Iron Horse. The CSRC asked for more documents.

On September 30, 2025, Iron Horse told its investors that Chinese counsel had advised all necessary filings had been made. The merger was completed, and trading began the next morning; that same day, the CSRC told its American counterparts that its review was still open. Nasdaq halted the stock on the spot.

In its penalty decision, signed May 7, the regulator quoted from the opinion Li Huabin had signed on September 18. Li said the company had completed the CSRC filing procedure and submitted true, accurate and complete materials. He had found no material legal obstacle to the listing. The filing was still under review. Li was fined RMB 200,000 ($28,000). Jiang Zhenjun, the executive responsible for the filing, was fined RMB 1.5 million ($208,000).

The fast-fashion company Shein tried to solve the problem by moving. It relocated its headquarters to Singapore, but the people who made most of its clothes were still in China. It tried New York, then pivoted to London, where Britain’s markets regulator approved a draft prospectus.

When the letter from the CSRC finally arrived on July 10, it was addressed to a Hong Kong listing and acknowledged the application from Shein’s operating company in Guangzhou. Further down, it reminded Shein to keep the commitments it had made to China’s planning and commerce ministries. Shein expressed its delight; choosing Hong Kong, it said, showed its determination to remain rooted in China and grow with it.

Even the frontier of artificial intelligence has not been immune to China’s long arm. When Meta agreed to buy Manus for about $2 billion, the AI startup had moved its headquarters and much of its team to Singapore. In March, two of its founders, Xiao Hong and Ji Yichao, attended a meeting with China’s planning agency in Beijing.

Afterward, they were told they could not leave, the Financial Times reported. The following month, the office that reviews foreign investments issued a one-sentence decision barring the purchase and ordering the parties to unwind it. State television explained that Manus had taken the people and technology behind its core business abroad, leaving its Chinese company with minor operations.

OPay

Which brings us back to OPay, whose prospectus shows how carefully a company now has to thread this needle.

China comes up most pointedly in two places. The first is the regulatory section, in which their Chinese lawyers explain why they believed no CSRC filing was required. OPay had no mainland revenue in 2025, all its operating assets and business activities were outside the mainland, and most of the senior managers running the business were either non-Chinese citizens or domiciled outside mainland China. Of its 992 employees, most work in Nigeria. OPay said it could not be certain whether the filing rules would apply.

The second is the table of principal shareholders. The company’s largest shareholder is James Zhou, also known as Zhou Yahui, who holds 21.3% through two companies he owns, one in the British Virgin Islands and one in the Cayman Islands.

Opera, the Norwegian browser company OPay was spun out of, holds 8.6%, and a subsidiary of Kunlun Tech, the Shenzhen-listed company Zhou controls, owns 68% of Opera. Between them, Zhou and Opera held nearly 30% of OPay before the listing. Kunlun’s filings in China describe Zhou as a Chinese national with no permanent residency abroad.

China’s rules on outward investment start with the investor. The newest of them, a State Council regulation in force since July 1, covers direct and indirect investments abroad by mainland companies and resident individuals.

The decree provides for security reviews of overseas investments and the transfer or disposal of stakes where national security could be affected. It leaves the detailed rules for individuals to the NDRC and the Ministry of Commerce. OPay has yet to name the regulator or say what it asked about. The rules its lawyers cited concern where the company does business. The outward investment rules give Beijing a separate way to ask about a mainland investor’s stake in a company abroad.

The IPO would have raised $304 million at a valuation of about $4 billion; Standard Bank’s plan to invest up to $200 million alongside it is on hold. OPay says it is confident the inquiry will be resolved in the near future.

Kunlun, meanwhile, will need the CSRC’s blessing in any case because on August 10 it announced plans to list shares in Hong Kong, which requires a filing. If OPay must file too, it should settle in for a wait.

The rules give the CSRC 20 working days to process a complete filing; filings it actually completed in the first half of 2026 took an average of 214 days, about seven months. As of October 16, it had completed 112 filings for Hong Kong listings and 1 for the United States. The queue of companies waiting to list in America has stood at 50 since June.

Six years after Ant, OPay’s IPO raises a question for any company doing business abroad. How much of Beijing’s reach comes with the people who own it?

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