Jack Ma is quietly giving up control over the legal entities that control Alibaba Group in a move aimed at reassuring shareholders of their rights in China’s most valuable company. It is also a reminder of weaknesses in corporate governance at the country’s biggest companies. Ma, who said he plans to retire from Alibaba in 2019, is surrendering control over the variable-interest entities, or VIEs, that hold the company’s business licences. Those licenses will be distributed among the company’s top executives, spreading authority more broadly and decreasing the risks that one or two people would have undue influence over the business. “We are in the process of enhancing the structure we use to hold our VIEs so that we can better ensure the stability and proper governance,” the company said in a July securities filing, adding that it plans to complete most of the changes in 2019. But the Ma episode is a stark example of how China’s rules leave shareholders vulnerable in an escalating ...

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