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Alibaba’s Ma Says Yahoo, Softbank Were ‘Wrong’ About Alipay

Jack Ma, chairman of Alibaba Group Holding Ltd. Photographer: Nelson Ching/Bloomberg
Jack Ma, chairman of Alibaba Group Holding Ltd. Photographer: Nelson Ching/Bloomberg

June 15 (Bloomberg) -- Alibaba Group Holding Ltd. Chairman Jack Ma said Yahoo! Inc. and Softbank Corp. failed to fulfill their duties as board directors, highlighting the rift between the Chinese online-commerce company and its biggest investors.

“Prior to the current negotiations, they exploited the imperfections of the company structure and engaged in stalling tactics,” Ma said at a briefing yesterday in Hangzhou, China, referring to Yahoo and Softbank’s role on Alibaba’s board over the Alipay online payment unit. “As shareholders, they were right but as directors, they were both wrong.”

Ma’s comments come amid negotiations with the two investors, which are seeking compensation for the divestment of Alipay, a deal Ma said was needed to expedite the application of an online payment license in China. Shares of Yahoo and Softbank have underperformed their respective benchmark indexes since last month’s disclosure that the unit was sold without the consent of the companies.

“Alibaba should have done more to get Yahoo and Softbank on board before acting on Alipay,” said Jim Tang, a technology analyst at Shenyin Wanguo Securities in Shanghai. “Alibaba needs to not only think of its own interests, but also needs to take care of the interests of the shareholders.”

Softbank President Masayoshi Son, Japan’s richest man, repeatedly cut short discussions about the reorganization of Alipay, said Ma, whose comments were confirmed by Alibaba in an e-mail.

Belated Notice

Yahoo climbed 4 cents to $15.20 at in Nasdaq Stock Market trading yesterday, while Softbank rose 0.1 percent to 2,983 yen in Tokyo. Alibaba Group, parent of e-commerce website and online shopping mall Taobao, is unlisted.

Takeaki Nukii, a spokesman at Tokyo-based Softbank, Japan’s third-largest mobile-phone operator, declined to comment. Dana Lengkeek, a spokeswoman for Yahoo, declined to comment.

Yahoo, owner of the biggest U.S. Web portal, last month said it wasn’t informed until March 31 about an August 2010 transfer of Alipay equity to a company outside of Alibaba. Ma previously said Alibaba’s board had discussed for three years the need to reorganize Alipay to comply with China’s restrictions on foreign investment in online payment operators.

Ma said the dispute with Yahoo is limited to commercial interests and “easy” to resolve, while differences with Softbank involve a “fundamental divergence in opinions” involving the development of Alibaba workers, Chinese magazine Caixin Online reported, citing an interview with Ma.

Yahoo is making “significant” progress in talks with Alibaba and Softbank over compensation, Chief Executive Officer Carol Bartz said on May 25.

“The reason you are there on the board is because you are protecting the interest of the investors,” said Duncan Clark, chairman of BDA China, a Beijing-based technology consultancy. He said he didn’t “understand” Ma’s comments yesterday.

To contact the reporter on this story: Mark Lee in Hong Kong at

To contact the editor responsible for this story: Young-Sam Cho at

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