Opinion | Ma's grip on Alibaba all in the name of preserving its founders' culture
The complex governance structure rejected by Hong Kong regulators not only gives Alibaba partners control, but also has zero chance of changing
As Alibaba drums up its initial public offering in the US, there will be increasing expressions of regret about Hong Kong giving up the big cake in return for upholding its "one share, one vote" principle.
It is indeed big. Despite a slowdown in its growth, the e-commerce giant's valuation is still estimated at US$200 billion.
While some are gritting their teeth, the big question to ask is what would Hong Kong have had to sacrifice to keep Alibaba's IPO here.
Judging from the corporate structure detailed in its filing made to the US regulators, the sacrifice would have been too big to bear.
It is a governance structure that will not only give Jack Ma Yun and the 26 Alibaba partners control over the board but also one that has zero chance of changing unless their stake drops below 5 per cent.
The partners can kick Ma and chief executive Joe Tsai out of the partnership … the reality is, however, more complicated
To Ma, it means being able to cash in 40 per cent of his 8.9 per cent holding if needed without compromising his control.
