Alibaba

Yahoo! A Modern Day Tale of Alibaba

Yahoo! A Modern Day

Tale of Alibaba

Case Overview

On 10 May 2011, Yahoo! Inc. (Yahoo!) indicated in its SEC filing that Alibaba

Group Holdings Limited (Alibaba) had transferred the ownership of Alipay to a

new entity controlled by Alibaba’s CEO Jack Ma. Yahoo! said in a press release

two days later that it was not informed of the ownership transfer until 31 March

2011, several months after the alleged transfer completion date of August

2010. Alibaba fought back the next day, arguing that the ownership transfer

had abided entirely to regulations and the board was informed beforehand

of this impending ownership change1 Yahoo! shares fell as much as 7.3% to

$17.20 on the initial announcement date, and lost more than 10% through

the week2. While public reactions were divided, some fundamental questions

inevitably surfaced in investors’ minds: whose side of the story should they

trust? Who should take responsibility for the delayed disclosure? Who is trying

to mislead the investors? The objective of this case is to allow a discussion

of corporate governance issues such as board representation and structure,

conflict of interest, board communication, decision making/authority as well as

directors’ duties.

This is the abridged version of a case prepared by Andrew Aw De Cai, Felicia Goh Pei Ting, Lin Jiajing, Low

Chern Yik, Min Tianzhu, Michelle Yeo Hui Min, Yvonne Tan Yan Qi under the supervision of Professor Mak

Yuen Teen and Dr Vincent Chen Yu-Shen. The case was developed from published sources solely for class

discussion and is not intended to serve as illustrations of effective or ineffective management or governance.

Consequently, the interpretations and perspectives in this case are not necessarily those of the organisations

named in the case, or any of their directors or employees. This abridged version was edited by Low Jiemin

under the supervision of Professor Mak Yuen Teen.

Copyright © 2013 Mak...