SHANGHAI May 30 Chinese regulators have given
the go-ahead to Alibaba Group Holding's online
payment affiliate Alipay to take control of fast-growing fund
firm Tianhong Asset Management Co as the e-commerce giant bulks
up its push into online finance.
The China Securities Regulatory Commission (CSRC) approved
Zhejiang Alibaba E-Commerce Co, the parent company of online
payment company Alipay, to purchase 51 percent of Tianhong,
according to a filing from Tianhong shareholder Inner Mongolia
Junzheng Energy & Chemical Industry Co on Thursday.
Alibaba is gearing up for what could be the world's biggest
tech IPO, and online finance has become another battleground for
the firm. Though the business unit will be largely kept separate
from the offering, it could play an important role in the entire
company's future growth.
Tianhong has gone from near obscurity to running China's
biggest money market fund by assets under management (AUM) in
just months after it launched fund platform Yu'e Bao, or
"leftover treasure", with Alipay in June last year.
Yu'e Bao's one-year interest rates are higher than a bank's
regulator-restricted rates for one-year deposits, and are an
incentive to deposit money with the platform.
Yu'e Bao, which people can run from their smartphones, is
also linked to China's biggest online payment platform Alipay,
similar to PayPal. Users can dip directly into Yu'e Bao to buy
products on Alibaba's huge online shopping websites and anywhere
else that takes Alipay.
Alipay's investment, valued previously at 1.18 billion yuan
($189.11 million), will see the firm inject 262 million yuan in
registered capital into the fund, according to the filing.
Tianhong had 554 billion yuan in AUM in the first quarter of
2014, from just 10.5 billion yuan a year earlier, according to
Z-Ben Advisors, a Shanghai-based investment management
($1 = 6.2399 Chinese Yuan)
(Reporting by Adam Jourdan; Editing by Ryan Woo)