US-listed internet portal Yahoo has seen a 14.2% drop in its share price after its minority investment in China-based peer Alibaba Group was downgraded.
On Wednesday, Yahoo told the US regulator that Alibaba transferred its ownership of payments system Alipay to a new company controlled by Alibaba chief executive and co-founder Jack Ma.
Yahoo owns about 40% of Alibaba after selling its Yahoo China operations to its portfolio company in 2005 and has a seat on its portfolio company’s board but alleged it had been unaware of the Alipay plans. Yahoo had rejected an exit offer by Alibaba last year.
In 1999 to 2000, Alibaba raised $25m from Japan-based conglomerate Softbank, investment bank Goldman Sachs, mutual fund manager Fidelity and others before floating.