(Reuters) – China Cinda Asset Management Co Ltd renounced a plan to acquire a 20% share in Ant Group’s Consumer Finance arm. The decision was made due to state pressure, sources familiar with the matter stated.

Cinda (one of China’s four largest state-owned asset management corporations) announced that the Ant investment was being canceled on Thursday without giving any explanation.

Further delay could be caused by the decision to restructure Ant as an affiliate. Alibaba (NYSE:) and its public-market debut was halted in the final minutes of November 2020, when it attempted to dual-list for $37 billion.

Cinda’s capital injection in Ant was approved by the primary regulator, the China Banking and Insurance Regulatory Commission. However, it did not receive approval from higher authorities according to two sources who have direct knowledge.

Sources claimed that Cinda, China’s State Council was among the officials who questioned Cinda about Ant’s request to invest while Ant’s core businesses were still being restructured and rejected the proposal.

Second source says that concern over the potential conflict between the state AMC’s directive of reform and asset managers’ core business, which requires them to concentrate on disposal of loans that have soured, prompted the rejection.

Cinda declined to provide any further details beyond the Thursday announcement announcing its pullback. It stated that the decision was made after careful commercial considerations and negotiations with Ant’s consumer finance division.

Ant has not responded to Reuters’ request for comment.

The company stated last week that they respected Cinda’s “business decision” and would ensure the “rectification work for the consumer finance division was completed.”

CBIRC, State Council Information Office didn’t immediately reply to inquiries for comment.

Due to the sensitive nature the matter, it was not possible for the source to be identified.

Cinda, established in Beijing to deal with soured state bank loans in the 1990s, is owned by the Ministry of Finance.

Cinda would be more invested in Chongqing Ant Consumer Finance Co Ltd had she withdrawn her investment plan. The asset manager would then have become its second-biggest shareholder.

Ant’s consumer finance division had intended to increase its registered capital from $8 billion to $30 billion ($4.73 trillion) and to bring in strategic investors.

Cinda filed to Hong Kong Stock Exchange last month that Ant would still have a half-share in the unit despite the capital raise.

Two other investors in the Ant unit – Jiangsu Yuyue Medical Equipment & Supply Co Ltd and Sunny Optical Technology Group Co Ltd – that had previously agreed to the capital increase said on Friday that they would postpone their investments in light of Cinda’s move.

($1 = 6.3472 renminbi)