Alibaba, the giant Chinese internet shopping mall, raised $21.8 b yesterday on its first day of trading. Thats a new record. Big institutional investors -- including U.S. pension funds that may have your pension savings -- have rushed in to buy its shares. But Alibama’s management says it is not bound by U.S. securities regulations to provide timely, detailed financial statements in the future. And its management structure is less accountable to shareholders than would be acceptable in the United States. Founder Jack Ma and 28 partners can nominate a majority of directors. Under Chinese law, most board members can be insiders. I may be old-fashioned, but I dont think the pensions of average Americans should be invested in foreign corporations governed by a handful of insiders who aren’t even legally bound to disclose even the minimum required by U.S. securities laws. Do you? Alibaba may be a good company, but who knows? Remember the children’s story Alibaba and the Forty Thieves?
Posted on: Sat, 20 Sep 2014 15:07:38 +0000
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