AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Source: hxdbzxy ,Shutterstock
Summary
- Alibaba Group has been ordered by the Chinese government to sell its media assets.
- The government officials were reportedly concerned at the breadth of Alibaba's online reach.
- These stakes are viewed unfavourably by the Chinese Communist Party.
The Chinese government has ordered Alibaba Group Holdings to sell its media assets as officials were concerned about the technology giant's hold over public opinion in the country. The Alibaba Group, founded by billionaire Jack Ma, has amassed media assets that span print, broadcast, digital, social media and advertising.
Image Source: ID 62154427 © Cpenler | Megapixl.com
Since early this year, the officials were discussing the matter after Chinese regulators reviewed a list of media assets owned by Alibaba, whose core business is online retail.
The government officials were reportedly concerned at the breadth of Alibaba's online reach through its media interests. They asked the group to come up with a plan to reduce its media holdings significantly.
Alibaba Group has stakes in the online social media platform Weibo, several popular Chinese digital and print news outlets and well-read English-language newspaper South China Morning Post (SCMP) in Hong Kong. Quite a few of these companies are listed in the US. These stakes are viewed unfavourably by the Chinese Communist Party as it threatens its power to reach out to the local public with their agendas.
Alibaba, in a statement, said, "The purpose of these investments is to provide technological support to the business upgrade and reap the benefits of commercial synergies with the core online retail businesses. It also said that there is no intervention in these companies' day-to-day operations or editorial decisions by Alibaba".
Image Source: ID 14249040 © Youths | Megapixl.com
The above was also confirmed by a spokesman from SCMP who said that the South China Morning Post takes its own and editorial decisions and has no operational integration with Alibaba.
Read More: Alibaba (NYSE:BABA) Stocks Surge As Jack Ma Resurfaces After 3 Months
SCMP was acquired by Alibaba Group in December 2015 for a total of US$266 million along with other media assets from Malaysian tycoon Robert Kuok, who had owned the paper since 1993. SCMP had agreed to be acquired due to an "uncertain" future for traditional publishing. It was also hopeful that Alibaba would likely "unlock greater value" from the business.
Besides Alibaba’s eCommerce business, it also has a good chunk of interest in the entertainment division, including Alibaba Pictures Group and Youku Tudou, one of China's largest video-streaming platforms.
The asset-disposal discussions have surfaced in the wake of friction between Beijing and Mr Ma. President Xi Jinping was said to be angered with Jack Ma for criticising his efforts to strengthen financial oversight.
