Business
China Buys ‘Golden Shares’ In 2 Units Of Alibaba
(CTN NEWS) – BEIJING – Business registration records revealed that China had purchased minority holdings with special rights in two domestic subsidiaries of digital giant Alibaba Group Holding Ltd (9988. HK) as Beijing continues to push for tighter control over online content.
For more than five years, Beijing has taken “golden shares” in privately held online media and content enterprises, and in more recent years, it has expanded these agreements to include businesses with enormous data holdings.
The first investments made public by the e-commerce company were those made over the past four months in the Alibaba businesses. One of the most visible targets of China’s two-year-long regulatory onslaught on tech companies has been Alibaba.
These “golden shares,” typically constitute 1% of a company, are purchased by funds or businesses with government backing in exchange for board seats and/or the ability to reject important corporate decisions.
/ GETTY IMAGE
Public business registration records revealed that in September of last year, a state-owned Zhejiang Media Group investment vehicle acquired a 1% share in Alibaba’s Shanghai-based Youku Film and Television division.
According to the records, Jin Jun, the general manager of one of Zhejiang Media Group’s companies, has also been named to the board of the Alibaba division.
At its stand at the 2020 China International Fair for Trade in Services (CIFTIS) in Beijing, Tencent displayed its logo.
WATCH: China acquires so-called 'golden shares' in two Alibaba units, business registration records show, as Beijing tries to strengthen control over online content https://t.co/IIEsM5Rx4X pic.twitter.com/bAIKXVeSpp
— Reuters Business (@ReutersBiz) January 13, 2023
Separate business registration records revealed that in December WangTouSuiCheng (Beijing), a unit of the Cyberspace Administration of China (CAC)-established China Internet Investment Fund (CIIF).
Purchased a 1% stake in Alibaba subsidiary Guangzhou Lujiao, whose primary focus is “research and experimentation.”
The WangTouSuiCheng investment was originally reported on by The Financial Times on Friday.
According to The Financial Times, the investment is intended to help Beijing maintain tighter control over the material of the e-commerce giant’s streaming video division Youku and web browser UCWeb.
An inquiry for comment from Alibaba received no response.
Additionally, according to unnamed sources cited by The Financial Times, negotiations are ongoing for the government to acquire golden shares in gaming giant Tencent Holdings (0700. HK).
Which would include a holding in one of the group’s primary subsidiaries.
The logo of Tencent is seen at Tencent office in Shanghai, China December 13, 2021. REUTERS/Aly Song/File Photo
Tencent chose not to respond.
According to Reuters, other companies with these golden share plans include Full Truck Alliance Co (YMM.N), the mainland subsidiaries of TikTok owner ByteDance, Kuaishou Technology (1024. HK), and Weibo.
According to sources who spoke to Reuters, having such golden shares can benefit companies attempting to obtain licenses to distribute online news and to broadcast online video and audio programs.
RELATED CTN NEWS:
Donald Trump’s Company Will Be Sentenced For 15 Years Of Tax Fraud
The New Economic ‘Regime’ Challenges Central Bankers
Disney Stock: What Smart Investors Know
