Alibaba denies favoring U.S. for its planned IPO

PanARMENIAN.Net - Alibaba Group Holding Ltd on Thursday, Sept 26, denied reports that it had ditched Hong Kong in favor of the United States for its planned IPO, which is estimated to raise up to $75 billion, according to China Daily.

An Alibaba representative in Beijing said that the country’s leading Internet conglomerate is sticking to what it has previously said: that it has made no final decision on the timing, location and terms for the issue, projected to be one of the world’s biggest this year.

“Reports claiming that Alibaba has chosen the U.S. over Hong Kong are not true,” the person said.

The listing committee of Hong Kong Exchanges & Clearing Ltd held its weekly meeting on Thursday.

Hong Kong media outlets reported that the committee discussed the IPO and decided not to make rule changes to accommodate Alibaba’s corporate structure, which allows its minority shareholding management to take control of the board and effectively take control of the company.

A spokeswoman for HKEx declined to reveal the listing committee’s discussions, saying that it’s a tradition that the agendas at these meetings are not disclosed publicly. She noted that while some media organizations reported the Alibaba IPO was on the agenda, others said it hadn’t been discussed.

Charles Li, HKEx’s chief executive, hinted that the HKEx might not compromise its rules for Alibaba. He wrote in a blog post that “as enshrined in our charter, in the event of a conflict, public interest is put ahead of shareholder interest at HKEx”.

Alibaba’s talks with the HKEx have focused on its dual-class share structure, where stakes held by management have more voting power than other shares. That structure clashes with the HKEx’s charter, which says all shareholders should have equal rights.

Alibaba sought a compromise earlier by saying that it only wanted to secure the right for its partners to nominate the majority of its board members. The HKEx pondered the proposal over the past few weeks.

Exchanges in the U.S., including the New York Stock Exchange and Nasdaq, permit dual-class shareholding structures. But the prevalence of class action lawsuits over corporate disclosure and negative perceptions of Chinese companies represent a barrier.

Hong Kong, in comparison, has had fewer legal battles and a long record of hosting red chips, or Chinese mainland companies incorporated overseas and listed in Hong Kong. Alibaba is incorporated in the Cayman Islands.

Meanwhile, Reuters reported that Yahoo Inc joined Japan's SoftBank Corp on Friday in backing Alibaba Group Holding Ltd's planned partnership structure.

The U.S. Internet company, Alibaba's second-largest shareholder with a 24 percent stake, said it's important for technology companies to be able to preserve their culture and strategy.

"As one of Alibaba's largest shareholders, Yahoo believes that management's efforts reflect the desire to govern the company for long-term success while also balancing the rights of shareholders," Jacqueline Reses, chief development officer of Yahoo and a member of Alibaba's board of directors, said in a statement.