By Paul Carsten and Anne Marie Roantree
HONG KONG (Reuters) - Alibaba Group Holding
"The one thing I can't understand is people think we're going to change our partnership structure just to accommodate a listing in Hong Kong, that's never going to happen," said Tsai, who also defended the company's move into fund management in mainland China.
"Hong Kong is a place where people take the one share-one vote principle very seriously," he added. "That's how they feel is the one thing that maintains the integrity of the market - I respect that."
Tsai's comments were the strongest defense so far by Alibaba of its partnership structure, putting the ball in Hong Kong's court to change its listing rules soon or risk losing what's potentially the biggest-ever initial public offering by an Internet company, surpassing social media giant Facebook Inc's
The insistence on maintaining the existing shareholding structure keeps the doors open for a listing overseas, with both New York and London having been raised as potential locations, although Tsai wrote in a blog post last September that Hong Kong is the "natural" first choice for Alibaba's IPO.
The Chinese e-commerce titan has been at odds with Hong Kong regulators, which last year rejected Alibaba's plans for an IPO in the city with a shareholder structure that allowed a group of top managers and founders to nominate and control the board, while holding only around 13 percent of the company's shares.
Hong Kong Exchanges and Clearing Ltd (HKEx) <0388.HK> and the Securities and Futures Commission have been discussing since late last year potential changes to listing rules to allow for "weighted voting rights". Discussions over a paper to be put for public consultation should last through the first quarter.
Tsai also addressed criticism that Alibaba's entry into China's fund management industry had come at the expense of the country's big state-owned banks and placed its customers at risk. "I don't think we need to respond to these claims about 'vampires'," Tsai said, addressing remarks made on China's state-owned television network in February.
"Sucking money out of the large banks and giving the benefits to the people, if that's what vampires do we're happy to be vampires, all the time."
Last June, Alibaba launched an online mutual funds platform with its Yu'e Bao product, allowing customers to buy and sell a single money market fund. By January, the fund, managed by Tianhong Asset Management Co, reported assets of 250 billion yuan ($40.7 billion) and had become China's biggest mutual fund.
Alibaba's fund offers rates of around 6 percent, almost twice the rate of bank one-year deposits, by buying higher rate-paying deposit products in the country's interbank market. China's government imposes interest rate restrictions on banks, with the upper limit on one-year deposits now capped at 3.3 percent.
In October, Alibaba's affiliated Small and Micro Financial Services Group bought a controlling stake in Tianhong and is also applying for a private banking license with partner China Wanxiang Holding Co Ltd.
The company also is preparing to offer credit cards for use online with China CITIC Bank Corp <601998.SS>, and has partnered with Tencent Holdings Ltd <0700.HK> and Ping An Insurance Group <601318.SS> to sell insurance online.
"We hope we can make changes to the financial system in China," Tsai said. "As you know, the financial system in China is a little bit antiquated. It's still very aspirational at this point."
($1 = 6.1402 Chinese yuan)
(Reporting by Paul Carsten and Anne Marie Roantree; Additional reporting by Elzio Barreto in HONG KONG and Matthew Miller in BEIJING; Editing by Kenneth Maxwell)