Control issue clouds Alibaba's Hong Kong IPO

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Flotation's prospects dim amid founder Jack Ma's apparent desire to stay in charge clashes with listing rules forbidding separate voting rights

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Jack Ma Yun, Chairman of Alibaba group. Photo: Xinhua

George ChenandRay Chan

Published: 12:00am, 16 Aug 2013Updated: 7:31am, 16 Aug 2013

Prospects for a Hong Kong listing this year for Chinese internet giant Alibaba have dimmed dramatically in the wake of disclosures by investment bankers that the mainland's No1 e-commerce firm is wrestling with how to keep management control after shares are sold to the public.

Market sources say the desire of chairman Jack Ma Yun to keep clear control of the company he founded in 1999 throws into doubt the likelihood of a Hong Kong share sale given strict listing rules that forbid dual structures that separate voting and ownership rights.

People close to Ma, who founded Alibaba in his hometown of Hangzhou, said the teacher-turned-entrepreneur had planned to move forward quickly with the listing of his Alibaba Group, but that sentiment had changed in recent weeks.

An Alibaba spokesman declined to comment on its plan for an initial public offering.

Market sources say Ma has been planning an IPO of shares in Alibaba Group since August last year, when he de-listed the flagship trade portal Alibaba.com from the Hong Kong stock market.

But that would not happen if he could not keep control of the company, investment banking sources told the .

Taking into account Ma's personal 7.4 per cent stake in Alibaba, the entire management team owns a combined 10.4 per cent stake in the firm. Japan's SoftBank owns 36.7 per cent and US internet giant Yahoo, 24 per cent, according to official information released by the two.