Getting to the Bottom of the Alipay Dispute

On June 14, Alibaba founder, Chairman and CEO Jack Ma sent shocks through the Chinese and international business communities when he announced his plans to unilaterally sever the variable interest entity (VIE) relationship between Alibaba, China's largest e-commerce firm, and Alipay, its online payment subsidiary.

The decision—which Ma made without the approval of the Alibaba board and over the objections of shareholders—has since ignited a nationwide discussion about the reliability of China's investment environment and the responsibility Chinese entrepreneurs must pay to their foreign contracts.