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SCMP scrambles to quell staff fears after report of China SOE bid

Hong Kong newspaper's owner Alibaba faces pressure from Beijing

The atrium of SCMP's newsroom in Hong Kong. The 118-year-old paper denied there were talks to change ownership. (Photo courtesy of SCMP)

HONG KONG/NEW YORK -- The South China Morning Post, the 118-year-old Hong Kong-based English-language newspaper owned by Alibaba Group Holding, sought to dismiss reports about a potential sale to a Chinese government-backed company, saying there were no plans for a change in ownership.

On Friday, Bloomberg reported that Bauhinia Culture (Hong Kong) Holdings, a news publishing company owned by the Chinese government, was "working on an offer" to acquire the paper, citing people familiar with the matter. Bauhinia's parent company is connected to the Hong Kong Liaison Office, the government agency that represents Beijing in Hong Kong.

It followed reports earlier in the year that Alibaba had come under pressure from the Chinese government to divest some of its media assets, including the SCMP.

In an internal email seen by Nikkei Asia, SCMP CEO Gary Liu told staff he had been asked by SCMP Chairman and Alibaba co-founder Joseph Tsai to convey a message that no sale was being planned.

"There has never been any discussion about SCMP's ownership, and Alibaba has no plans for any change. There's no basis for any rumor or speculation," the message stated.

"SCMP has grown into a global news organization with a critical and unique 'Asian Voice.' I have full confidence that readers of the Post will continue to rely on our credible, fact-based reporting and plurality of views."

Liu added in the memo: "Please do not be distracted by ill-informed speculation. We must focus on serving our readers around the world, with the confidence that we have earned through our growing impact and success. In moments of public doubt, I am grateful for this company's convictions and everyone's hard work and commitment."

An SCMP spokesperson told Nikkei Asia Friday: "In March 2021, when Bloomberg last published a false report about SCMP's ownership, we categorically denied its claims. Any reports suggesting that Alibaba is considering a sale of SCMP continue to be incorrect."

"We want to reemphasize our statement from March that Alibaba is fully committed to SCMP's mission and business goals and that there are no plans for an ownership change," the spokesperson said in an emailed response.

But speculation about the possibility of SCMP turning into a state-owned media outlet sent shock waves through the newsroom.

"I am worried because no matter how many times the management denies these stories, they keep coming back," one staff member said. "Some of the journalists who have reported the news previously, particularly at the [Wall Street Journal] have a good record on Alibaba stories, so of course it is of concern. We don't know what will happen, but fears of an SOE takeover will not help the mood in the newsroom, where we've already lost a lot of colleagues."

A separate senior Alibaba source said on condition of anonymity that anything to do with SCMP would be decided by Alibaba's co-founders, Jack Ma and Joe Tsai. "There is no way for other people to know whether it's true or not. No one else will be involved with matters of SCMP except these two," the source said.

Alibaba has been in Beijing's crosshairs, as President Xi Jinping seeks to reduce the e-commerce giant's influence on society.

In March it was reported that the Chinese government requested that Alibaba dispose of its media assets, which includes SCMP,  YouTube-like streaming platform Youku Tudou, entertainment company Huayi Brothers and video-sharing site Bilibili.

In September, Mango Excellent Media, a subsidiary of the government-run Hunan TV, said in a stock exchange filing that Alibaba planned to sell its entire 5% stake in the company. Alibaba had bought the stake just one year earlier.  

Co-founder Jack Ma has faced increasing pressure from the Beijing government since his October 2020 speech criticizing Chinese regulators for stifling innovation.

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