Alibaba's leaders garner more power over board
Top executives and investors in the Chinese e-commerce company can now name two additional board members following the firm's IPO, according to a new regulatory filing.
A handful of top executives and investors in Alibaba Group now have the right to name a majority slate onto the company's board following its initial public offering, giving the group tighter control over the Chinese e-commerce giant.
That ability would grant a small group of individuals substantial power to operate a firm expected to generate one of the largest IPO offerings ever in the US, with Alibaba predicted to raise up to $20 billion, above the $16 billion that Facebook raised two years ago.
Alibaba's decision to list in the US, rather than on the Hong Kong market, stemmed in part from disagreements with Chinese regulators over listing rules -- specifically over a company's control of appointments to its board. The IPO is expected to launch this fall.
The new right was outlined in revised Securities and Exchange Commission paperwork filed Friday, showing that the so-called Alibaba Partnership of 27 people, including founder Jack Ma, will be entitled to name two more directors onto the Alibaba board following the IPO, increasing its the board's overall size.
In previous regulatory filings, that partnership indicated it planned to designate four of nine directors. The newest filing shows that the group can now name six of 11 directors, which would give the partnership a majority.
The company reported in the filing that its revenue jumped 52 percent to $8.45 billion in the fiscal year ended in March from the year earlier, with profit more than doubling to $3.75 billion.
The new filing was reported earlier by Reuters and The Economist.