Alibaba accuses Meituan CEO of libel for questioning founder’s integrity

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Wang Xing, Meituan founder and CEO (Image credit: Meituan).

Following controversial comments by the CEO of Meituan about Alibaba founder Jack Ma for “an integrity problem,” the two Chinese internet giants are engaging once again in a public spat, with Alibaba leaders accusing the Meituan executive of defamation.

Meituan CEO Wang Xing told Bloomberg in an interview released Thursday that he still thinks Ma “has an integrity problem,” referring to the spinoff of Alibaba financial payment subsidiary Alipay without board approval in 2011. With that move, Wang added, Ma inflicted lasting damage to the global reputation of China’s business leaders.

Wang was referring to Ma’s separation of the Alipay unit from Alibaba Group in June 2011, which was then transferred to a Chinese company in his control. This immediately prompted fury from major shareholders including Yahoo and Softbank, who complained they were blindsided by the transfer.

The Chinese e-commerce giant, technically a foreign-invested entity, later responded by saying it was necessary to restructure Alipay as a domestic Chinese company, and therefore to be eligible for the payment license application required by the central government. At the time, Chinese regulators required that any payment company without a license had to cease operation by September 2011, WSJ cited Alibaba as saying.

“They tried to lie about that. They even tried to say the Chinese government forced them to do that. That was wrong,” Wang said in the Bloomberg interview. “I think the impact of that incident is still underestimated.”

“Petty and potentially libelous comments from a disgruntled rival neither hurts Alibaba nor alleviates the competition its rival faces,” Wang Shuai, Alibaba’s head of PR said Thursday on microblogging platform Weibo in response to Wang’s remarks.

Meituan has battled Alibaba in its core food delivery business for years, following a short-lived friendship when the Hong Kong-listed life services platform received $50 million in a Series B led by Alibaba and Sequoia in July 2011.  However, Wang has retained control over the company and refused Alibaba’s attempts at acquisition. Alibaba later backed Shanghai-based Ele.me in 2015, after which Meituan received $4 billion in a fundraising round led by Tencent in October 2017.

“Without approval from two major shareholders, Ma transferred Alibaba’s core asset to a company with his own name at a very low price,” Hu Shuli, founder of China’s top business magazine Caixin, said in June 2011 (our translation). “Ma undermined the spirit of a contract, which is the cornerstone of a market economy.”