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Money & Markets
Expropriation Risk in China: How Much Should We Worry About the Alipay Transfer?
STAN ABRAMS MAY 31 2011, 10:31 PM BOOKMARK
A lot of folks are still talking about the ongoing fight between Yahoo and Alibaba. As you no doubt recall, Yahoo is a tad bit miffed at China e-commerce behemoth Alibaba. Yahoo owns 43% of Alibaba, which until recently gave the American firm partial interest in valuable online payment company Alipay. Unfortunately for Yahoo, Alipay was sold (Yahoo says without Board authorization) to a company owned by Alibaba CEO Jack Ma. Now Yahoo owns 0% of Alipay. Bummer.
I wrote a post about the corporate brawl earlier this month, mostly from the perspective of general risk assessment of China by foreign companies in light of the current mini bubble with Chinese Net firms. Let’s take another look at the topic.
Seeking Alpha has an article (penned by contributor “Northwest Investor”) on the subject focusing on the alleged collusion between private company Alibaba and the Chinese government to essentially expropriate an asset from a foreign investor, Yahoo.
Investors sold on the China story need to take heed: If what you buy in China only stays “bought” as long as convenient for Beijing and their local friends, you might consider that you’re just leasing the asset. Like Hong Kong and Macau, if they want it, sooner or later its going back.
What’s particularly troubling about this story is the suggestion of