Alibaba’s Ma Sees ‘Large’ Alipay Payout, China Entrepreneur Says

Alibaba Group Holding Ltd. Chairman Jack Ma said negotiations with Yahoo! Inc. and Softbank Corp. over the spinoff of the Alipay unit will result in the payment of a “very large” compensation for the two shareholders, China Entrepreneur magazine reported, citing an interview with Ma.

Ma said he will ensure Yahoo and Softbank are compensated now and in the future for Alibaba’s loss of Alipay, according to the magazine. The executive faces pressure from the U.S. government and the media to resolve the issue, according to the Chinese-language report.

Alibaba transferred Alipay, the nation’s most-popular online-payment service, to a Chinese company controlled by Ma in August 2010, a transaction that wasn’t ratified by Alibaba directors. Yahoo, Softbank and Alibaba have made “substantive and encouraging progress” in talks toward an agreement regarding Alipay, the companies said in a June 21 statement.

John Spelich, an Alibaba spokesman in Hong Kong, confirmed Ma was interviewed by China Entrepreneur on June 14 and declined to verify the article’s contents. Lisa Tam, a Hong Kong-based spokeswoman at Yahoo, couldn’t immediately comment. Takeaki Nukii, a spokesman at Tokyo-based Softbank, declined to comment.

Sunnyvale, California-based Yahoo, the biggest shareholder in Alibaba, said in May that it wasn’t informed until March 31 about the transfer of Alipay equity to Ma’s company. 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 payment operators, and that the spinoff was “transparent” and “legal.”

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