BEIJING Nov 1 The online payment affiliate of
China's biggest e-commerce company Alibaba Group Ltd will be restructured to attract new strategic
investors, in a move that will reduce the shareholding of
Alibaba's founder Jack Ma in the affiliate.
Zhejiang Alibaba E-Commerce Co Ltd will be restructured as a
new company in which 60 percent of its shares will be offered to
new strategic investors, Lucy Peng, head of the restructured
entity, said in a letter published on its official Weibo
microblog account on Friday.
Ma will see his shareholding reduced from 80 percent to
about 7 percent in the new company, or no greater than his
shareholding in Alibaba Group, according to the letter.
The restructured company, to be known as Alibaba Small and
Micro Financial Services Group, will hold Zhejiang Alibaba's 100
percent stake in unit Alipay, as well as its shareholding in
Alibaba's micro-finance unit, Zhongan Insurance, and Tianhong
Asset Management Co.
Alipay is China's biggest third-party payment platform,
providing payment solutions to 460,000 merchants, and with 800
million registered accounts.
The remaining 40 percent in the new company will be offered
to nearly 24,000 employees at Alibaba Group and Zhejiang
Alibaba, said Peng, former chief executive of Alipay. That
includes the share held by Ma.
The announcement on Friday will have no impact on existing
agreements with Alibaba and the group's shareholders SoftBank
Corp and Yahoo! Inc, Alibaba spokesman John
In 2011, Ma sparked a public dispute with Alibaba Group's
biggest outside investors when he separated Alipay from Alibaba.
Ma said at the time that new Chinese government regulations on
third-party payment services required the changes.
The companies later settled, in a deal that guaranteed
Alibaba 49.9 percent of Alipay's earnings prior to an initial
public offering, and as much as $6 billion if Alipay sells
shares to the public.
"Today's announcement underscores that employees of both
Alibaba Group Holdings and Alibaba Small and Micro Financial
Services Group are being incentivized to work hard to achieve
success for the company," Spelich said.
Alibaba Group, through Alipay, is introducing a variety of
financial services to complement its e-commerce businesses.
Besides Alipay, which provides users with an online payment
system, the Hangzhou-based company has also started fund and
insurance sales, as well as small loan finance.
In June, Alipay launched Yu E Bao, a fund management
platform, allowing Alibaba customers to directly invest cash
from their Alipay account into a money market fund managed by
Tianhong Asset Management Co.
The Zenglibao fund is the most successful fundraising by any
mutual fund in China this year, with managed assets reaching
55.7 billion yuan ($9.14 billion) at the end of September.
Alibaba also received approval this week from China's
securities regulators to act as a third party for the online
sale of fund products on its Amazon-like Taobao.