Alibaba partners tighten grip in revised filing before IPO
Concerns raised as partners revise filing, allowing mainland group to appoint more directors without shareholder approval
The partnership that governs Alibaba has strengthened its grip over the mainland e-commerce giant as it prepares for its US initial public offering.
The group - currently made up of 27 executives - was entitled "without the need for any additional shareholder approval" to appoint more directors, according to an amended US regulatory filing on Friday. It would do so if less than a simple majority of board members were partnership nominees.
Alibaba, which is preparing for what may be the largest listing in the United States, had already said the partnership had the exclusive right to nominate a majority of the board, with ordinary shareholders to vote on those nominees.
The partnership intends to designate four of the nine original directors, and could appoint two additional members, bringing the total board number to 11.
"This ability to expand board seats is just another mechanism to give the partnership control and keep control of Alibaba," said Eric Jackson, president of hedge-fund Ironfire Capital.
"It doesn't surprise me because the whole reason they're doing the IPO in New York is because they felt that the partnership was a key component of their competitive advantage."