Ownership leverage:  Obviously pushed by regulatory pressures Alibaba founder Mr. Ma transferred Alipay, Alibaba’s payment system, into a new entity under his control without first agreeing with shareholders Yahoo and Softbank.   This may be considered to be tantamount of abusing minority shareholders rights and also indicates a poor relationship between shareholders. 

The People’s Bank of China (China’s Central Bank) is the new regulator for payment systems.  Any payment business to operate in China will have to be licensed by the People’s Bank of China before September 1, 2011.  Applications from 32 companies including Alipay have been put out for public consultation and supervision.  Accordingly payment systems operating in China have to be under Chinese ownership.

It is said that discussions are still going on about the restructuring of Alibaba Group concerning its payment system Alipay, but the relationship between Ma, Yahoo and Softbank are expected to deteriorate further.

Source:  Brankingviews.com; The Wall Street Journal; Caijing