Alibaba’s online payment unit of the Alibaba Group Ltd will be restructured to attract new strategic investors, in a move that will reduce the shareholding of Alibaba’s founder Jack Ma in Alipay.

Zhejiang Alibaba E-Commerce Co Ltd will be restructured as a new company in which 60 percent of its shares will be offered to new strategic investors. Ma will see his shareholding reduced from 80 percent to about 7 percent in the new company, or no greater than his shareholding in Alibaba Group, according to the letter.

The restructured company, to be known as Alibaba Small and Micro Financial Services Group, will hold Zhejiang Alibaba’s 100 percent stake in unit Alipay, as well as its shareholding in Alibaba’s micro-finance unit, Zhongan Insurance, and Tianhong Asset Management Co.

Alipay is China’s biggest third-party payment platform, providing payment solutions to 460,000 merchants, and with 800 million registered accounts.  The remaining 40 percent in the new company will be offered to nearly 24,000 employees at Alibaba Group and Zhejiang Alibaba, said Peng, former chief executive of Alipay. That includes the share held by Ma. The restructuring will have no impact on existing agreements with Alibaba and the group’s shareholders SoftBank Corp and Yahoo! Inc, Alibaba spokesman John Spelich said.

Alibaba Group, through Alipay, is introducing a variety of financial services to complement its e-commerce businesses. Besides Alipay, which provides users with an online payment system, the Hangzhou-based company has also started fund and insurance sales, as well as small loan finance.

In June, Alipay launched Yu E Bao, a fund management platform, allowing Alibaba customers to directly invest cash from their Alipay account into a money market fund managed by Tianhong Asset Management Co. The Zenglibao fund is the most successful fundraising by any mutual fund in China this year, with managed assets reaching 55.7 billion yuan ($9.14 billion) at the end of September.

Alibaba also received approval this week from China’s securities regulators to act as a third party for the online sale of fund products on its Amazon-like Taobao.

Source:  Yahoo Finance