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NEW YORK (Reuters) – character Inc's effort with Alibaba Group intensified on weekday as they issued contradictory statements over the Asiatic company's designate of a field cyberspace asset to its honcho executive.

Analysts said the handover of Alipay, an online e-commerce commercialism grouping similar to eBay Inc's PayPal, to Alibaba Chief Executive Jack Ma has low the continuance of Yahoo's 43 proportionality Alibaba stake. Alibaba also operates China's largest e-commerce company, Alibaba.com Ltd.

Yahoo said it had been blindsided by the deal, patch Alibaba countered that character was aware of the dealings by morality of having a commission seat, today held by former character Chief Executive Jerry Yang, who is also a character director.

Shares of character hit fallen as much as 14 proportionality since the consort prototypal disclosed the designate in a restrictive filing after markets closed on Tuesday.

The feud underscores the suspenseful relation between Ma and Carol Bartz, Yahoo's honcho chief since January 2009.

Bartz is low pressure to increase revenue and intend more visitors to Yahoo, which is losing connector to rivals including Google Inc and Facebook. The Alibaba wager is thoughtful digit of Yahoo's most priceless assets.

Both Bartz and character Chairman Roy Bostock are in the "hot seat," said Eric Jackson, managing member of the inclose money Ironfire Capital, which owns character stock.

"At best it makes it countenance same character -- Jerry Yang especially -- has been discover of the loop," he said. "The character commission has to be hunting into the mirror and saying: 'What do we requirement to modify to attain this right?'"

In salutation trading, character shares were down 61 cents, or 3.6 percent, at $16.56, after early falling as much as 7 proportionality to $15.96. They had closed weekday at $18.55.

BATTLE OVER BASICS

Yahoo invested $1 1000000000 in Alibaba in 2005, but Alibaba has prefabricated country it wants to acquire discover Yahoo's stake.

"I just don't trust them," Ma told Forbes entrepot in its Apr 11 edition.

Bartz told Reuters in September she has no plans to sell.

Some analysts judge that Yahoo's continent assets, including a 35 proportionality wager in character Nihon Corp, equal at least half the Sunnyvale, California-based company's mart value.

Yahoo and Alibaba do not concord on when Alipay was transferred to Ma, or whether Alibaba's commission knew about it.

Alibaba said the commission was told in July 2009 that the designate had occurred. character said the designate happened in August 2010, giving Ma flooded control of Alipay, and character did not see of it until March 31, 2011.

Japan's Softbank Corp also owns a wager in Alibaba. Four directors attain up Alibaba's board, including Yang and Softbank founder Masayoshi Son.

"I find it impracticable to believe, as a logical matter, that a commission member from character could sit through a proceeding whereby a priceless asset was transferred to the Alibaba CEO, and not object," said Manning Warren, a joint accumulation academic at the University of Louisville.

In a evidence on Friday, Alibaba spokesman Evangelist Spelich said directors were "told in a July 2009 commission gathering that majority shareholding in Alipay had been transferred into Asiatic ownership."

According to Alibaba, the advise was necessary to obey with Asiatic law, to secure Alipay could move operating.

Later Friday, character stood by its early evidence that the Alipay care occurred "without the noesis or support of the Alibaba Group commission of directors or shareholders."

Yahoo said it is in "active and constructive" talks with Alibaba and Softbank "to preserves the integrity" of its stake.

"It's surprising you crapper hit that sort of communication lapse," said Ken Sena, an Evercore Partners analyst.

David Einhorn's inclose money Greenlight Capital last week took a "significant" wager in Yahoo, locution its Alibaba welfare could finally be worth more than character is now.

LEGAL RAMIFICATIONS

Warren said character strength try to process Ma low Algonquin law, locution Ma would hit to show that his acquisition of a field asset from his own consort had been conducted fairly.

Meanwhile, if in fact character had been in position to kibosh the Alipay transfer, character itself strength be sued, said Mark Rifkin, a relation at Wolf, Haldenstein, Adler, Freeman & Herz.

"It could modify give uprise to a character shareholder verify against Alibaba," given the 43 proportionality stake, he added.

Disputes much as this could damp U.S. investors' enthusiasm for companies based in China, Ironfire's politician said. "I definitely conceive it crapper spook people," he said.

(Additional news by Aditi Sharma in Bangalore; editing by Evangelist Wallace and Gerald E. McCormick)

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