BEIJING, China, Jan 13 (Portal) – China has acquired minority stakes with preferential rights in two domestic units of tech giant Alibaba Group Holding Ltd (9988.HK), company registration records showed, amid Beijing a campaign to strengthen control over the Internet expands content.
Beijing has been acquiring “golden stakes” in private online media and content companies for more than five years, and in recent years has been expanding such deals to include companies with vast data assets.
The shares acquired in the Alibaba units over the past four months are the first to come to light for the e-commerce company. Alibaba has been one of the most prominent targets of China’s two-year regulatory crackdown on tech giants.
These golden stocks, which typically make up about 1% of a company, are bought by government-backed funds or companies that are given board representation and/or veto power over key business decisions.
Public business filing records showed that in September last year, an investment vehicle owned by the state-owned Zhejiang Media Group acquired a 1% stake in Alibaba’s Shanghai-based film and television division Youku.
Zhejiang Media Group has also appointed Jin Jun, the general manager of one of its subsidiaries, to the Alibaba entity’s board of directors, the records showed.
Separate company registration records showed that WangTouSuiCheng (Beijing), a company of the China Internet Investment Fund (CIIF) set up by the Cyberspace Administration of China (CAC), acquired a 1% stake in Alibaba’s Guangzhou Lujiao unit in December acquired, whose main focus is “research and experiment”.
The Financial Times, which first reported WangTouSuiCheng’s investment on Friday, said the goal of the investment is for Beijing to tighten control over the content of the e-commerce giant’s streaming video unit Youku and web browser UCWeb.
Alibaba did not respond to a request for comment.
The FT also reported, citing unidentified sources, that talks were underway for the government to take over golden shares in gaming giant Tencent Holdings (0700.HK), which would include a stake in one of the group’s key subsidiaries. Tencent declined to comment.
Other firms that have such golden share agreements include Full Truck Alliance Co (YMM.N), as well as mainland subsidiaries of TikTok owner ByteDance, Kuaishou Technology (1024.HK) and Weibo, Portal previously reported.
Owning such “golden shares” can help companies when trying to acquire licenses to distribute online news and show online image and audio programs, sources told Portal.
Reporting by Yingzhi Yang, Brenda Goh and Josh Horwitz; Additional reporting from Rishabh Jaiswal and Mrinmay Dey; Edited by Uttaresh.V, Rashmi Aich and Kenneth Maxwell
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