CHINA’S regulators have given the go-ahead to Alibaba Group Holding’s online payment affiliate Alipay to take control of fast-growing fund firm Tianhong Asset Management Co. as the e-commerce giant bulks up its push into online finance.

    The China Securities Regulatory Commission (CSRC) approved Zhejiang Alibaba E-Commerce Co., the parent company of online payment company Alipay, to purchase 51 percent of Tianhong, according to a statement from Tianhong shareholder Inner Mongolia Junzheng Energy & Chemical Industry Co. on Friday.

    Alibaba is gearing up for what could be the world’s biggest tech initial public offering (IPO), and online finance has become another battleground for the firm. Though the business unit will be largely kept separate from the offering, it could play an important role in the entire company’s future growth.

    Tianhong has gone from near obscurity to running China’s biggest money market fund by assets under management in just months after it launched fund platform Yu’e Bao, or “leftover treasure,” with Alipay in June last year.

    Yu’e Bao’s one-year interest rates are higher than a bank’s regulator-restricted rates for one-year deposits, and are an incentive to deposit money with the platform.

    Yu’e Bao, which people can run from their smartphones, is also linked to China’s biggest online payment platform Alipay, similar to PayPal. Users can dip directly into Yu’e Bao to buy products on Alibaba’s huge online shopping websites and anywhere else that takes Alipay.

    Alipay’s investment, valued previously at 1.18 billion yuan (US$189.11 million), will see the firm inject 262 million yuan in registered capital into the fund, according to the Inner Mongolia Junzheng statement.

    Tianhong had 554 billion yuan in assets under management in the first quarter of 2014, from just 10.5 billion yuan a year earlier, according to Z-Ben Advisors, a Shanghai-based investment management consultancy.

    (SD-Agencies)