(Reuters) – China is moving to take minority stakes with special rights in the local units of Alibaba Group Holding Ltd and Tencent Holdings Ltd, the Financial Times reported on Friday.
Seeking influence, Beijing began taking these stakes, called “golden shares,” in private online media companies – usually about 1% of a firm – more than five years ago. These golden stakes are bought by government-backed funds or companies which gain a board seat and/or veto rights for key business decisions.
An entity under the state investment fund set up by the China’s internet regulator last week took a 1% stake of an Alibaba unit in Guangzhou to tighten control over content at the ecommerce giant’s streaming video unit Youku and web browser UCWeb, according to the report, citing people familiar with the matter and public records.
However, the specifics of the government’s plan to take golden shares in Tencent remain under discussion, but they will involve a stake in one of the group’s main China operating subsidiaries, the report added.
Tencent and Alibaba did not immediately respond to Reuters’ requests for comment.
(Reporting by Rishabh Jaiswal and Mrinmay Dey in Bengaluru; editing by Uttaresh.V and Rashmi Aich)
