House Of Fraser Pulls £29 Million From Tandem Investment

House of Fraser’s Chinese owners pulled £29 million of a £35 million investment in London-based, app-only bank Tandem because of concerns that the Chinese government might reject the deal, according to Business Insider.

House of Fraser, which is owned by Chinese group Sanpower, announced in December that it was investing £35 million in Tandem, a U.K. startup founded in 2014. But shortly after that announcement, China indicated that it would start to curb Chinese firms’ investments in foreign companies, mainly due to a slowing domestic economy.

As a result, Fraser Financial Services Limited canceled the rest of the investment over the weekend “due to uncertainty about whether China’s State Administration of Foreign Exchange would approve the transaction.”

The company had already invested £6 million in Tandem, but this shortage means Tandem will miss the deadline for some banking license requirements and be forced to reapply. It has raised £39 million to date from investors, including eBay Founder Pierre Omidyar, and is now looking for additional funding to make up for the House of Fraser loss.

While Tandem is delaying the launch of its savings product, the startup is still expected to release an app to help people manage their money and credit cards later this year.

“While this investment not completing is disappointing, it does not change our vision: to build a service that helps our customers improve their lives with money and a business that delivers long-term returns for our investors,” said Ricky Knox, founder of Tandem, in a statement. “The only change for customers is that we will no longer be launching savings accounts in the short term. Our app will still help our customers manage their money better and actually find them cash, and our fair credit card will launch in a few months. We will be in a position to quickly reapply for our permissions to offer savings accounts at the right time for our customers.”