(Adds Alibaba's estimate of company's value)
By Deepa Seetharaman
SAN FRANCISCO, July 11 A group of 27 top
executives and investors in Alibaba Group Holding Ltd
IPO-BABA.N, including co-founder Jack Ma, can appoint another
two directors to the company's board once it goes public,
according to a U.S. regulatory filing on Friday.
The move would expand the Chinese e-commerce company's board
to 11 members from nine and cement the group's control over the
board after Alibaba's initial public offering on the New York
Stock Exchange later this year.
Alibaba is expected to execute what could be the largest
U.S. technology IPO in history. It powers four-fifths of all
online commerce conducted in China, the world's second-largest
economy, and handled more transactions in 2013 than Amazon.com
Inc and eBay Inc combined.
In its updated prospectus filed with the U.S. Securities and
Exchange Commission, Alibaba boosted its estimated value to $130
billion, up from more than $116 million in earlier filings.
The figures, which fall short of several analyst estimates
of the company's worth, were calculated to set employee
compensation and do not necessarily represent the IPO price.
The company also gave a more detailed explanation of its
controversial decision in 2011 to spin out its Alipay payments
service, a PayPal-like affiliated established in 2004.
Ma started Alibaba in his one-room apartment in 1999 and has
since branched out into areas as diverse as e-payments and
financial investment. But its complex governance structure and
Ma's outside investments have raised questions about potential
conflicts of interest and investors' ability to sway Alibaba's
strategy and direction.
He and 26 other Alibaba co-founders and senior executives at
the company and its affiliates are part of a powerful group
dubbed the "Alibaba Partnership." Alibaba has said the interests
of the partnership may conflict with those of investors.
"This governance structure and contractual arrangement will
limit your ability to influence corporate matters, including any
matters determined at the board level," Alibaba wrote.
Ma's group already planned to designate four of Alibaba's
nine directors prior to its IPO. With the new disclosure, the
group can name six of 11 directors if they expand the board.
Ma has an 8.9 percent stake in Alibaba. Other investors in
Alibaba include SoftBank Corp with a 34.3 percent stake and
Yahoo Inc, which owns 22.5 percent.
In the updated filing, Alibaba said it needed to spin out
Alipay and turn it into a domestic entity in 2011 to prevent
delays in obtaining an operating license under newly issued
Alibaba spun out Alipay to a group that includes Ma, who
holds a 46 percent stake in Alipay through another company,
Zhejiang Alibaba E-Commerce Co. Alipay provides the lion's share
of payment services for the company's retail marketplaces.
"This action enabled Alipay to obtain a payment business
license in May 2011 without delay and without any detrimental
impact to our China retail marketplaces or to Alipay," Alibaba
(Reporting by Deepa Seetharaman; Editing by Dan Grebler and