China moving to take ‘golden shares’ in Alibaba, Tencent units

China is moving to take minority stakes with special rights in the local units of Alibaba Group Holding Ltd and Tencent Holdings Ltd, the Financial Times reported.

Seeking influence, Beijing began taking these stakes, called “golden shares,” in private online media companies – usually about 1% of a firm – more than five years ago. These golden stakes are bought by government-backed funds or companies which gain a board seat and/or veto rights for key business decisions.

An entity under the state investment fund set up by the China’s internet regulator last week took a 1% stake of an Alibaba unit in Guangzhou to tighten control over content at the ecommerce giant’s streaming video unit Youku and web browser UCWeb, according to the report, citing people familiar with the matter and public records.