(Yicai Global) Dec. 26 -- Jack Ma, founder of China's internet and e-commerce giant Alibaba, recently met with the Chinese Football Association (CFA) officials to discuss his plans to buy a stake in Beijing Guoan Football Club, one of the teams competing in the Chinese Football Association Super League (CFA Super League), commonly referred to as Chinese Super League. Since Alibaba also has shares in Guangzhou Evergrande Football Club, another Chinese Super League team, the deal needs the CFA's approval.
As, Ma met with CFA president Cai Zhenhua accompanied by Chang Zhenming, chairman of CITIC Group, one of the main shareholders of Beijing Guoan FC, reported the Beijing Youth Daily on Dec. 24. During the talks, Ma made it clear that he wants to buy a stake in the club. However, the meeting was inconclusive, it said.
Prior to the meeting, market sources said that Alibaba's internet financial platform Zhejiang Ant Small and Micro Financial Services Group Co. intends to initiate a common stake in Beijing Guoan FC with another investor, Beijing Aiqiruidong Investment Management Center via its subsidiary Hundsun Electronics Group Co. If the deal is completed, the two will have 36 percent and 28 percent of Beijing Guoan FC shares respectively, and the original Beijing Guoan shareholders will hold a 36 percent stake.
Under the CFA regulations, the same individual or legal person (including company shareholders and its subsidiaries) shall not control more than two clubs or football organizations. The CFA will determine whether there is an association between the two clubs if controlled by the same individual or legal entity.
Alibaba, founded by Ma, bought shares in Evergrande Club at a price of CNY1.2 billion (USD172.7 million) in 2014. The club has later changed its name to Guangzhou Evergrande Taobao Football Club. Alibaba currently owns about 40 percent of the club shares.
Ma's meeting with CFA officials sought to obtain CFA's approval on his planned stake in Beijing Guoan. According to the Beijing Youth Daily, Ma said in the meeting that he only has a very small stake in Alibaba Group, which would amount to only 2.9 percent if converted into shares in the Evergrande Club. Ma also claimed he has never asked about Guangzhou Evergrande Club's business operations. If he owns shares in both clubs at the same time, it cannot be regarded as an association between the two clubs as the shares in one of the clubs would amount to a small percentage.
The CFA said it will closely examine the deal based on the meeting proceedings. If Beijing Guoan FC officially applies for a capital increase, the China Football Association will formally decide whether there is an association with the Guangzhou Evergrande Club.