Tung Chee-hwa set to join Alibaba board
Former HK chief executive named as an independent director as company reveals partnership and other details before offering
Tung Chee-hwa, the first chief executive of Hong Kong, will join the board of e-commerce giant Alibaba Group as an independent director soon after its initial public offering in New York, according to the company's updated US regulatory filing.
Hangzhou-based Alibaba has also named for the first time the senior partners who will help executive chairman and co-founder Jack Ma Yun set the direction for the company, which has been on a huge investment spree since last year.
Its listing is tipped to be the biggest-ever by an internet company, surpassing that of social network leader Facebook's US$16 billion listing in 2012. It is not known which stock exchange, the NYSE or Nasdaq, Alibaba will list on.
Yahoo co-founder and former chief executive Jerry Yang and J. Michael Evans, who retired as vice-chairman of Goldman Sachs in December, will also serve as independent directors. Evans is also a former Goldman Sachs Asia chief who helped develop the US bank's China business.
Alibaba credited Tung's "strategic vision, his deep experience and perspective as a business and government leader, and his long history and proven track record of building and strengthening relationships between China and the United States" as reason for the appointment to its board.
Tung served as the city's chief executive after the handover from July 1, 1997 to March 12, 2005, mainly during the tenure of Jiang Zemin as president. Jiang's grandson, Alvin Jiang Zhicheng, is a founding partner of Boyu Capital, a mainland-focused investment firm that owns a stake in Alibaba.
Tung is currently the vice-chairman of the 12th National Committee of the Chinese People's Political Consultative Conference and the founding chairman of the China-United States Exchange Foundation, a non-profit organisation in Hong Kong that promotes understanding between China and the US.
Among Alibaba's other prominent directors is Masayoshi Son, the founder, chairman and chief executive of Tokyo-listed SoftBank. Son has been an Alibaba director since 2000.
Alibaba's filing with the SEC revealed 27 partners, including Ma. The youngest is Sabrina Peng Yijie, the 35-year-old vice-president of International, Small and Micro Financial Services Company at Alibaba, while the oldest partner is 54-year-old Timothy Steinert, Alibaba's general counsel and corporate secretary.
The 27 partners hold 324.35 million shares of Alibaba from a total of 2.33 billion shares after the offering, representing 13.9 per cent of the company, according to the filing.
Alibaba's partnership structure allows a group of top managers and founders to nominate and control the board while holding a minority of the shares. Hong Kong regulators' refusal to allow Alibaba to list in Hong Kong with such an unusual partnership structure drove the company to opt for a US listing.
Alibaba's first revision to its initial public offering prospectus showed net income rose to about 23.1 billion yuan (HK$29.1 billion) in the year ended March 31, compared with 8.4 billion yuan a year earlier. Revenue rose 52 per cent to 52.5 billion yuan, with much of that gain coming in the quarter that ended in December.
In the quarter to March, Alibaba's revenue rose 38.7 per cent to 12.03 billion yuan, while net profit grew 37 per cent year on year to 5.54 billion yuan. That compares with a growth of 71 per cent for the same quarter a year earlier. Operating margins narrowed to 45 per cent from 51 per cent.
Additional reporting by Bloomberg