E-commerce giant grapples with Hong Kong over plan for partners
Alibaba is reportedly prepared to move its IPO – expected to be the largest tech offering since Facebook – to New York if Hong Kong rules prevent its ‘partners’ from maintaining control over who sits on the board.
The firm’s founder, Jack Ma, and other senior executives want to ‘safeguard the culture of innovation’ at the company through dual-class shares, despite owning little more than 10 percent of the firm, the Financial Times reports.
Ma sent a company-wide email on Tuesday, formally detailing the partnership model for the first time and explaining its importance to the firm, reports Reuters. As well as ensuring innovation at Alibaba, Ma’s email says the plan is designed to protect the firm from the ‘temptation to seek short-term gains’. He stresses that it is not the aim of the partnership ‘to exert greater control over the company.’
Alibaba has been lobbying Hong Kong Exchanges and Clearing (HKEx) to allow it to keep its partnership structure after it goes public, but so far this has reportedly been met with resistance as the HKEx rules forbid dual-class shares that offer greater power to a small group of owners.
Citing ‘people familiar with the listing plans’, Reuters says that while Alibaba is inclined to have its IPO in Hong Kong, New York remains an option. The FT also reports that the company is prepared to shift its IPO plans if Hong Kong sticks to its principles.
According to reports of Ma’s email, the founder says Alibaba is ‘not concerned about where to go public, but we do care that wherever we end up going public must support this type of open, innovative, responsible culture that values long-term development.’