- Two PRC individuals, Wei Chen and Lili He, who are relatives of Mr. Shao-Ning Johnny Chou (CEO), and Hangzhou Ali Venture Capital Co., Ltd., a PRC domestic company and consolidated entity of Alibaba, hold 36.285%, 36.285% and 27.43%, respectively, equity interest in the VIE
- Key Excerpts
- VIE Structure
- VIE Risks
- VIE Revenue
Key excerpts from filing(s) - related to VIEs
Due to PRC legal restrictions on foreign ownership and investment in domestic mail delivery and value-added telecommunication services, we, similar to all other entities with foreign-incorporated holding company structures operating in our industry in China, provide the services that may be subject to such restrictions in China through our VIE. Our VIE, a PRC domestic company, holds a courier service operation permit that allows it to provide domestic mail delivery services in addition to parcel delivery services and an ICP license that allows it to provide value-added telecommunication services, all of which may constitute part of our comprehensive service offerings. We have entered into certain contractual arrangements which collectively enable us to exercise effective control over the VIE and absorb or receive substantially all of the economic risks and benefits generated from its operation. As a result, we include the financial results of the VIE in our consolidated financial statements in accordance with U.S. GAAP as if it were our wholly-owned subsidiary.
We generate the majority of our revenue through our VIE, and rely on contractual arrangements that allow us to receive substantially all of the economic benefits generated from the VIE. In 2014, 2015 and 2016, approximately 74%, 71% and 61% of our total revenue, respectively, was attributed to our VIE. In the six months ended June 30, 2017, 65% of our total revenue was attributed to our VIE.
Risks identified in filing(s) - related to VIEs
If the PRC government finds that the agreements that establish the structure for operating certain of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Our contractual arrangements with our VIE may result in adverse tax consequences to us.
We rely on contractual arrangements with our VIE and its shareholders for our China operations, which may not be as effective as direct ownership in providing operational control and otherwise have a material adverse effect as to our business.
The shareholders of our VIE may have conflicts of interest with us, which may materially and adversely affect our business and financial condition.
We may lose the ability to use, or otherwise benefit from, the licenses, approvals and assets held by our VIE, which could severely disrupt our business, render us unable to conduct some or all of our business operations and constrain our growth.
Our corporate actions are significantly influenced by our principal shareholders, including our founder, chairman and chief executive officer, Mr. Shao-Ning Johnny Chou, Alibaba and Cainiao Network, which have the ability to exert significant influence over important corporate matters that require approval of shareholders, which may deprive you of an opportunity to receive a premium for your ADSs and materially reduce the value of your investment.
Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of the draft PRC Foreign Investment Law, and its enactment may materially and adversely affect our business and financial condition.
||Contribution of VIEs %
|RMB (in millions)
Ownership and Voting power details
Related Blog Entries