Alibaba expected to receive US approval for IPO despite federal commission warnings

Alibaba Group's proposal for what could be the largest initial stock offering in US history is sailing through Washington with few bumps.

While a federal commission has warned that the offering by the world's biggest internet retailer poses "major risks" for investors, the reaction from securities regulators, Congress, cabinet secretaries and competitors has been a collective shrug.

Alibaba owes its success navigating Washington's political shoals in part to a handful of key hires over the past three years. The Hangzhou-based company retained a lobbying firm headed by Ronald Reagan's last chief of staff; a former general counsel from the US Trade Representative Office; and an ex-chief of staff at the Department of the Treasury to oversee international communications and government relations.

The Securities and Exchange Commission - the principal regulatory hurdle Alibaba must clear before raising perhaps US$20 billion - has shown no sign it will reject the stock sale that could come as early as next month.

"This is going to be a watershed IPO," said Anant Sundaram, a corporate governance expert at Dartmouth's Tuck School of Business. "How come nobody at the US Trade Representative, nobody at the Department of Commerce, nobody at some congressional oversight body is saying: 'Guys, what is going on here?' It just puzzles me that nobody is concerned."

Senator Robert Casey, a Pennsylvania Democrat on the Senate Finance Committee, sounded a rare discordant note this week, asking the SEC to show how it is addressing risks for buyers of stock in Chinese offerings structured like Alibaba's.