Understanding China, One Blog at a Time

An American in China

China’s Alibaba Buying Up Companies Owned By Communist Party Elite? Fraud Alert?

Posted by w_thames_the_d on September 15, 2014


Alibaba is as dirty as they come. This smoke and mirrors disaster in the making is a few years from collapse. Now. Jack Ma is buying companies owned by communist generals.

Just think, now you can give your hard earned money to the people with whom we will soon be fighting a shooting war. Great job America!,,

Excerpt

Alibaba has been one of the big success stories in China, a dominant private company in a country where state-owned enterprises typically command the heights of the economy. Its initial public offering, expected this week, could be the largest debut ever for an Internet company in the United States.

Alibaba’s acquisition of Citic 21CN, which was announced in January, provides an example of how the rapid growth of the private sector is also benefiting the country’s political elite, the so-called princelings, or relatives of high-ranking officials. Since Alibaba announced that it would buy a controlling stake in Citic 21CN for about $170 million, the pharmaceutical data company’s stock has risen more than sevenfold. As a result, Ms. Chen’s shares have soared in value by about $500 million.

That windfall has been previously reported. But the familial connections, traced to the stone tablet in Changshou, are largely unknown to the general public.

There is no evidence that Alibaba was aware of such connections. The company previously said it bought Citic 21CN for its “vast pool of pharmaceutical product data,” as part of an effort to build out technology standards for medical and health information. It was a “pure business decision,” according to a person with knowledge of the deal who was not authorized to talk publicly.

Although Alibaba declined to comment for this article, citing regulatory restrictions on public statements ahead of a public offering, the company has said it relies on the market — not political connections — to drive its business.

“To those outsiders who stress companies’ various ‘backgrounds,’ we didn’t have them before, we don’t have them now, and in the future we won’t need them!” the company said in a statement in July after a report that several investment companies tied to the sons and grandsons of senior Communist Party leaders owned stakes in Alibaba, including New Horizon Capital, whose founders include the son of former Prime Minister Wen Jiabao.

Ms. Chen did not respond to repeated requests for an interview made by fax, phone and visits to the company’s Hong Kong and Beijing offices.

Link

http://fda.einnews.com/article__detail/223831118?lcode=8DWPqPuUsDVNDakfEIxsCA%3D%3D

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