Alibaba, the Chinese e-commerce company planning a massive IPO this year, couldn’t resist taking a few parting shots at Hong Kong before heading off to list in New York.
The company ended discussions with the Hong Kong Stock Exchange this week, after it refused allow Alibaba to bend its rules to give the company’s partners, rather than its investors, control over the board of directors. Japan’s Softbank and US-based Yahoo, which control 37% and 24% of Alibaba, respectively, both said on Friday they support the plan to keep control in the partners’ hands.
Confirming Alibaba’s move for the first time, vice chairman and co-founder Joe Tsai said in a blog post that Hong Kong was the company’s natural first choice for a public listing because of its roots in China. But he argued it is even more crucial for the company’s current partners, who own just 13% of the company, to maintain control “without being influenced by the fluctuating attitudes of the capital markets.” In a final rejoinder, he said:
We understand Hong Kong may not want to change its tradition for one company, but we firmly believe that Hong Kong must consider what is needed in order to adapt to future trends and changes. The question Hong Kong must address is whether it is ready to look forward as the rest of the world passes it by.
Hong Kong’s exchange faces the prospect of becoming redundant as foreign exchanges woo Chinese companies and mainland China’s own stock exchanges mature, as we’ve previously addressed here at Quartz.
Hong Kong’s outspoken shareholder rights advocate David Webb didn’t allow Tsui’s digs at Hong Kong to pass unchallenged. In his own blog post, he dubbed Tsui’s words a “corporate tantrum,” and said the partnership scheme was “something that even America has never seen before, where a self-selecting perpetual pool of managers gets to nominate more than half the board of directors.”
Hong Kong Exchange CEO Charles Li has not yet responded to Alibaba’s jibes, but depending on what he dreams about tonight, it might happen soon, so stay tuned.