No change in Alibaba's ownership of SCMP despite rumours about state-backed potential acquisition

The South China Morning Post will not be sold by Alibaba despite a previous reporting from Bloomberg which said a Chinese government-owned firm was planning to buy the English-language newspaper. In a Reuters report, it quoted an internal letter sent by SCMP to its staff, saying that Joe Tsai, Alibaba's co-founder and SCMP's chairman, had asked SCMP's CEO Gary Liu to pass on a message that the tech company had no plans for a change in ownership. Tsai said there had never been any discussion about SCMP's ownership, and Alibaba had no plans for any change. "There's no basis for any rumor or speculation."

Previously, Bloomberg reported that Chinese government-owned Bauhinia Culture (Hong Kong) Holdings, established in 2019, was working on an offer to acquire the newspaper established in 1903. The report also said other state-backed entities could look to acquire SCMP too. 

MARKETING-INTERACTIVE has reached out to SCMP for further comments. 

Alibaba acquired SCMP in 2015 for US$266 million but in March 2021, the Chinese government requested Alibaba to sell its media assets, which included SCMP. According to The Wall Street Journal which quoted its sources, this move came as Chinese officials became increasingly concerned with Alibaba's influence over public opinion in China. Discussions over Alibaba potentially divesting its media assets have been held since early this year following a review of the eCommerce giant's media assets.

WSJ added that "officials were appalled" at how widespread its media interests have grown and reportedly requested for Alibaba to come up with a plan to "substantially curtail" it.

The acquisition covered the daily newspaper along with a stable of magazines including Harper's Bazaar and The Peak, recruitment services, outdoor media, events, education and digital media businesses. It also bought an approximately 18% stake in Sina Weibo for US$586 million in 2013, multiple media outlets including Bloomberg reported then.

Alibaba and its co-founder Jack Ma have come under scrutiny since late 2020, after Ma incurred the wrath of Chinese regulators last October, resulting in the abrupt suspension of Ant Group's IPO last November. Ma said in a speech that traditional banks should move away from their "pawnshop operating model" and questioned if international financial regulations are fit for the Chinese economy.

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