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Carol Bartz, chief executive officer of Yahoo! Inc., speaks at the Web 2.0 Summit in San Francisco, California, U.S., on Tuesday, Nov. 16, 2010.

Tony Avelar/Bloomberg

China's Alibaba Group said it told its board in July 2009 that it had transferred ownership of its online e-commerce business to Chief Executive Jack Ma, rejecting allegations by major shareholder Yahoo Inc. that it had been blindsided by the deal.

Yahoo, which owns 43 per cent of Alibaba Group and holds a board seat, said Thursday that it had not been informed of the deal until March 2011.

The transfer had occurred "without the knowledge or approval of the Alibaba Group board of directors or shareholders," Yahoo said.

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Yahoo issued the following statement in response to recent media reports regarding the timing of the restructuring of Alipay:

On March 31, 2011, Yahoo! and Softbank were notified by Alibaba Group of two transactions that occurred without the knowledge or approval of the Alibaba Group board of directors or shareholders. The first was the transfer of ownership of Alipay in August 2010. The second was the deconsolidation of Alipay effective in the first quarter of 2011.

Yahoo! disclosed this restructuring in its 10-Q after discussions with Alibaba Group and obtaining a better understanding of this complex situation.

Yahoo! continues to work closely with Alibaba and Softbank to protect economic value for all interested parties. We believe ongoing negotiations among all of the parties provide the best opportunity to achieve an outcome in the best interest of all stakeholders.

Yahoo shares were down 5.6 percent in early trade.

Yahoo disclosed in a regulatory filing Tuesday that Mr. Ma had taken full ownership of Alipay, a Chinese service similar to PayPal. Yahoo shares fell as much as 9.8 per cent in reaction.

Alibaba directors were "told in a July 2009 board meeting that majority shareholding in Alipay had been transferred into Chinese ownership," Alibaba Group spokesman John Spelich said in a statement on Friday.

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Alibaba has made it clear that it wants to buy back Yahoo's stake in the company.

Yahoo's Asian assets, which include a 35 per cent stake in Yahoo Japan, represent at least half of Yahoo's market value, according to some analyst estimates.

Yahoo Chief Executive Carol Bartz told Reuters in September that Alibaba "constantly" approaches Yahoo about repurchasing its stake but said Yahoo had no plans to sell it.

Yahoo's Jerry Yang is a board member of Alibaba Group.

Yahoo shares were down 5.6 per cent at $16.20 (U.S.) in early trading on Friday.

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