Sept. 29 – Hangzhou-based Alibaba Group has ditched plans to list in Hong Kong after the territory could not agree to the terms of the proposed listing of the Chinese company’s IPO. Instead, the company will list in New York. The decision is a major embarrassment to China and the Hong Kong regulators as Alibaba Group is the country’s largest online shopping outlet, owning both the popular Alibaba and Taobao portals.
The reasons for the shift to New York deal with the desire for Alibaba founder Jack Ma’s wish to introduce a shareholding structure that would give him and a select group of just 27 other top executives the perpetual right to nominate who sits on the board. The Hong Kong securities regulator refused to permit such a structure. Alibaba will now list in New York, where such structures are permitted and have been used in the cases of Google and Facebook when they went public. The listing is expected to generate US$15 billion.
Alibaba’s top two portals generated gross sales of US$170 billion last year, more than Amazon and eBay combined. China has the world’s largest population of internet users, although it currently remains behind the United States and Japan in online consumer spending. It is expected to claim the top spot by 2015.