By Ayishah Ma in Hangzhou
Just a day after top officials of Alibaba Group said the e-commerce giant still preferred Hong Kong as the venue of its initial public offering, its founder and chairman Jack Ma said the company will not list in the city unless regulators agree to its proposed partnership structure.
“If a bourse does not support the partnership structure, we will not list there,” Ma told Hong Kong media in Hangzhou on Friday. “At least until today, we have yet to hear any welcoming from Hong Kong.”
Apparently taking a hard stance on the issue, the internet entrepreneur said, “We are not playing games as we have no time to do so. What we want is a real discussion… I don’t want to fight for the listing matter. I just want to fight for Hong Kong’s future.”
Back in 2008 when the company delisted, Ma said the company would come back to Hong Kong someday. Alibaba applied to list again in Hong Kong this year but was rejected by regulators because of its partnership structure.
The proposed set-up would give different degrees of voting power to holders of different classes of shares, which, in effect, would give management stronger control of the company.
In rejecting the application, the Securities and Exchange Commission said such a structure was not in accordance with the listing rules. Market observers also said Ma’s proposal could work against the interest of shareholders.
“We are not asking Hong Kong to change for Alibaba,” Ma said. “The forward-looking thing to do is to review [the issue].”
He said he hopes to do another round of discussions with the regulators before the year ends. What counts is the sincerity of the talks as well as openness to innovation when it comes to the listing regulations, Ma said.
He also said an article published by Charles Li, the chief executive of Hong Kong Exchanges and Clearing Ltd. (HKEx) (00388.HK), on his blog on Thursday looks “proactive and positive”. He said he would be pleased if Hong Kong invited him for a discussion.
In the article, Li said HKEx should reconsider its rules on partnership structure and not close the door to innovative, trend-setting companies. The market regulator should be innovative and proactive in dealing with such cases, Li said.
Meanwhile, the proposed structure has been accepted by the New York Stock Exchange and the NASDAQ Stock Exchange, news portal Sina.com reported on Oct. 20, citing a spokesperson for Alibaba.
NASDAQ is honored to have Alibaba listed on its board, Dow Jones reported Wednesday, citing chief executive Bob Greifeld. He declined to comment on whether he has personally met with Alibaba executives on the proposed listing, the report said.
Regardless of whether it will go public and where it will list, the company hopes the public can understand its real demand and its proposed partnership structure, which can provide a culture of open, innovative, responsible and sustainable development, Alibaba said in a statement on Thursday.
Ma told reporters that a lot of his colleagues in the company favor a US listing. “These are young people who are concerned about their faces, so there is no reason to go to a place where we are not welcome,” he said, despite the fact that he personally likes Hong Kong and wants to keep his promise to come back to the city to list.
“We paid the price, we lost the chance of buying back our shares from Yahoo at a cheap price, so this is our trade-off,” Ma said. Yahoo currently owns about 24 percent of Alibaba.
“Going public is not important to us, where to list is also not so meaningful to us,” he said. “The important thing is that we start a discussion and Hong Kong should discuss this for its youth and Hong Kong’s future. I would regret it if we don’t discuss.”
On the possibility of a US listing, Ma said: “We won’t easily say that we didn’t have any discussion with the US, but I didn’t go to the US.”
“If we get to list in the US, we will choose China as the second place, and Hong Kong will never be a choice as there is no reason to do all three of them,” he said.
“China is always a favorable place for us as we were born here, but the external environment doesn’t allow us to do so.”
Last month, Alibaba launched a mobile instant messenger called Laiwang in a bid to compete with Tencent Holdings Ltd. (00700.HK)’s WeChat.
Alibaba aims to boost the number of Laiwang users to 100 million from the current one million, a company spokesperson told the Hong Kong Economic Journal’s EJ Insight on Oct. 3. The spokesperson did not mention a timeframe for achieving the target.
To help achieve the target, Alibaba has required its staff to invite at least 100 friends each to use Laiwang before the end of November in order to receive a red packet, according to media reports.
“The statement is just for fun, but the thing is if colleagues don’t like the products of the company, they shouldn’t be working here,” Ma said.
“Even if all our colleagues get 100 friends on Laiwang, making 2.5 million users, we still can’t defeat Tencent,” he said.
Competition will help in the healthy development of the internet industry, Ma said.
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