Alipay's parent firm purchases controlling stake in financial services company

By Marc Castro

Oct 10, 2013 09:55 AM EDT

The amount of CNY 1.18 billion or USD193 million would paid out by the parent firm of Co for majority shareholdings in an asset manager as a bid to expand investments into financial services.

The parent firm is Zhejiang Alibaba E-Commerce Co, which is controlled by billionaire Jack Ma, would be purchasing new shares to obtain the 51% of Tian Hong Asset Management Co. The said shareholdings was reported in a statement with the Shanghai Stock Exchange from Inner Mongolia Junzheng Energy & Chemical Industry Co. Junzhieng is another Tian Hong shareholder. As part of the acquisition, Alipay had offered fund instruments from Tian Hong since June 2013.

This is but one step in a grand plan by Alibaba Group Holding Ltd, Ma's flagship company and China's largest e-commerce firm to gain a foothold in the country's financial industry. SImilarly, other internet based companies such as Tencent Holdings Ltd and Baidu Inc are entering the financial services industry as the government modifies guidelines in compliance with the direction set by China Premiere Li Kequiang for the reduction of government participation in the economy. 

Alipay's service is similar to what Paypal offers currently has 800 million registered accounts as of July 2012. 

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