Alibaba Group Holding Ltd. revealed a broader network of Chinese government stakes in its business units, in response to an inquiry from the US Securities and Exchange Commission, Bloomberg reported on Monday.
The company disclosed this information in filings in the US and Hong Kong over the weekend, following comments from the SEC staff.
The filings come as China’s ruling Communist Party has announced plans to play a larger role in guiding the country’s technology and science development. This move has raised concerns among investors and could lead to increased scrutiny in the US.
Chinese state-owned enterprises have stakes in six of Alibaba’s direct-sales businesses, contributing less than six per cent of its total revenue in the fiscal year to March 2023.
Additionally, state-owned companies have ownership in several business entities in sports, health, logistics, and local consumer services. Sovereign wealth funds from Singapore, Malaysia, the United Arab Emirates, and Qatar also hold small stakes in some of Alibaba’s units.
Alibaba did not specify the entities involved in its filing, as its corporate structure is complex and undergoing an overhaul. The company is considering splitting off several business lines into standalone companies.
This latest filing adds to the “golden shares” that Chinese government entities took last year in units from Chinese tech leaders, allowing the government to influence key company decisions.
Alibaba has faced challenges in revamping its e-commerce, logistics, and cloud empire over the past year. Chief Executive Officer Eddie Wu has taken direct control of its core businesses to address rising competition and regulatory risks.
