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©Reuters. FILE PHOTO: A logo of Tencent is seen at its booth at the China International Fair for Trade in Services (CIFTIS) 2020 in Beijing, China September 4, 2020. REUTERS/Tingshu Wang
BEIJING, China (Reuters) – China has acquired minority stakes with special rights in two domestic units of the tech giant Ali Baba (NYSE:) Group Holding Ltd, business registration documents showed as Beijing extends a campaign to tighten control over online content.
Beijing has been acquiring “golden shares” in private online media and content companies for more than five years, and has expanded those deals to companies with vast amounts of data in recent years.
The shares taken over the past four months in Alibaba units are the first to come to light for the e-commerce company. Alibaba has been one of the top targets of China’s two-year regulatory crackdown on tech giants.
These gold shares, typically equal to about 1% of a company, are purchased by government-backed funds or companies that gain board representation and/or veto rights for key business decisions.
Public company registration records showed that in September last year, an investment vehicle of state-owned Zhejiang Media Group acquired a 1% stake in Alibaba’s Youku Film and Television unit, which is based in Shanghai.
Zhejiang Media Group also appointed Jin Jun, general manager of one of its subsidiaries, to the board of directors of the Alibaba unit.
Separate business registration filings showed that WangTouSuiCheng (Beijing), an entity of the China Internet Investment Fund (CIIF) established by the Cyberspace Administration of China (), acquired a 1% stake in Alibaba unit Guangzhou Lujiao in December , whose main objective is “research and experimentation”.
The Financial Times, which first reported on WangTouSuiCheng’s investment on Friday, said the goal of the investment is for Beijing to tighten control over the content of e-commerce giant Youku’s streaming video unit and browser web UCWeb.
Alibaba did not respond to a request for comment.
The FT also said, citing unidentified sources, that discussions were underway for the government to take gold shares in gaming giant Tencent Holdings (OTC:) which would involve a stake in one of the group’s major subsidiaries. Tencent declined to comment.
Other companies that have such gold stock deals include Full Truck Alliance Co, as well as TikTok owner ByteDance’s mainland subsidiaries Kuaishou Technology and Weibo (NASDAQ:), Reuters previously reported.
Having such gold shares may be useful to companies when they seek to obtain licenses to broadcast news online and to showcase online visual and audio programming, sources told Reuters.