Alibaba denies princelings’ influence on the company

Summary:Responding to a NYT report which connects some of its shareholders to Chinese political powers, Alibaba said the background of its investors mattered little to the group and slammed some international media for making things out of nothing.

Chinese e-commerce giant Alibaba, which is now busy preparing for an initial public offering in the US, disclosed new information on Chinese institutional investors on Monday to refute a New York Times report which connects the company to China’s top political power.

In a statement on its Sina Weibo account, Alibaba said the three Chinese investment companies – Boyu Capital, Citic Capital Holdings and CDB Capital – have small stakes, holding 0.55 percent, 1.1 percent and 0.47 percent of Alibaba’s common shares, respectively.

The three Chinese investment firms bought their stakes in 2012 when the global capital markets were down and few others were willing to make an investment, Alibaba said in the statement posted late on Monday.

The New York Times' Monday report indicated Alibaba only disclosed the owners of about 70 percent of its shares as part of its regular filings for the offering.

The three investment firms mentioned above were trying to finance a US$7.6 billion deal to help Alibaba buy back half of Yahoo's Alibaba stake, and children or grandchildren of the Chinese political elite – known as princelings – work for the three investment firms, according to the Time’s article.

“Such connections matter. They help secure deals, potentially giving companies an advantage in a highly competitive business environment,” the Times’ article wrote.  

Alibaba says the Times’ article is “based on its own self-inference and imagination”, which mistakenly described its investors and also drew obviously biased conclusions.

“We understand some international media is accustomed to cast doubt or make judgment on Chinese society and companies,” said Alibaba, adding the global community must learn to adapt to the facts of the Chinese market.

“To those outsiders who stress our company’s various backgrounds, we didn't have them before, we don’t have them now, and we will not need them in the future,” Alibaba wrote in the statement.

Alibaba also highly praised these three firms’ investments in the group as “courageous and professional” in a depressed market back in 2012.

 

Topics: China

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Cyrus Lee, writing under a pen name, is a Hong Kong-based reporter in an English-language newspaper and a correspondent for a radio station.

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