Understanding China, One Blog at a Time

An American in China

How Alibaba’s Jack Ma Stole Billions from Yahoo

Posted by w_thames_the_d on September 20, 2014


Jim Chanos called Alibaba’s Jack. Ma a thief, and here is why…
Excerpt

Jack Ma: Alibaba and Its Conniving Thief

Cover Story

On the last day of March this year, AlibabaGroup’s C.E.O. Jack Ma casually informed Yahoo and Softbank-the majority (over 70%) owners of Alibaba Group- that he had transferred ownership of Alibaba’s payment company, Alipay to a private company owned by himself and a friend.

Yahoo was stunned.

Alipay is the Chinese equivalent of PayPal, only it is more than twenty times larger. It is the largest third- party payment center in China, with over 550 million registered users in China and partners with more than 65 financial institutions such as Visa and MasterCard.

Greenlight capital, which made a substantial investment in Yahoo shares in May 2011, stated that Yahoo’s stake in Alipay could be ultimately worth more than Yahoo’s current (in May) market value of 25 billion dollars.

The transfer was ostensibly done at the behest of the Chinese Government which implied that it frowned upon foreign ownership of Chinese financial institutions. However, the manner in which Jack Ma transferred the ownership of Alipay looks to me like outright theft.

According to Yahoo, any transaction of 10 million dollars by Alibaba has to be approved by its corporate board.

This was not done.

Instead, Jack Ma states that the subject of Chinese ownership of Alipay was brought up in an earlier meeting sometime in 2009.

Both Yahoo and Softbank deny that any permission was given for Mr. Ma to transfer Alipay’s ownership to any entity, let alone himself.

The manner in which Mr. Ma did the transfer is also telling. He did it without any notification to Alibaba’s board and incorporated Alipay in the Cayman Islands.

Why the Cayman Islands?

The Cayman Islands are the epicenter of fraudulently acquired funds. Its banking secrecy laws are stricter than that of the Swiss and as far as corporate fraud locations: it is the place to park any ill-gotten gains. Remember Bre-X? The Cayman Islands is where assets of the gold stock fraud were stored and never recovered for its victims.

Jack Ma states it was the transfer was done in a “lawful” and “transparent” manner. But why did Mr. Ma wait for the better part of a year before he informed Yahoo and Softbank that they no longer had any stake in Alipay?

Jack Ma may insist he is not a thief. After all, he paid Alibaba a whopping 300 million yuan for Alipay.

Sounds like a lot doesn’t it?

300 million yuan does sound like a lot of cash- that is until you do the math and convert it into American dollars: 46 million dollars.

What a steal.

Continue
http://www.midwesttechnologymagazine.com/modules.php?name=News&file=article&sid=434

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