By Deepa Seetharaman
SAN FRANCISCO (Reuters) - A group of 27 top executives and investors in Alibaba Group Holding Ltd, including co-founder Jack Ma, can appoint another two directors to the company's board once it goes public, according to a U.S. regulatory filing on Friday.
The move would expand the Chinese e-commerce company's board to 11 members from nine and cement the group's control over the board after Alibaba's initial public offering on the New York Stock Exchange later this year.
Alibaba is expected to execute what could be the largest U.S. technology IPO in history. It powers four-fifths of all online commerce conducted in China, the world's second-largest economy, and handled more transactions in 2013 than Amazon.com Inc and eBay Inc combined.
In its updated prospectus filed with the U.S. Securities and Exchange Commission, Alibaba boosted its estimated value to $130 billion, up from more than $116 million in earlier filings.
The figures, which fall short of several analyst estimates of the company's worth, were calculated to set employee compensation and do not necessarily represent the IPO price.
The company also gave a more detailed explanation of its controversial decision in 2011 to spin out its Alipay payments service, a PayPal-like affiliated established in 2004.
Ma started Alibaba in his one-room apartment in 1999 and has since branched out into areas as diverse as e-payments and financial investment. But its complex governance structure and Ma's outside investments have raised questions about potential conflicts of interest and investors' ability to sway Alibaba's strategy and direction.
He and 26 other Alibaba co-founders and senior executives at the company and its affiliates are part of a powerful group dubbed the "Alibaba Partnership." Alibaba has said the interests of the partnership may conflict with those of investors.
"This governance structure and contractual arrangement will limit your ability to influence corporate matters, including any matters determined at the board level," Alibaba wrote.
Ma's group already planned to designate four of Alibaba's nine directors prior to its IPO. With the new disclosure, the group can name six of 11 directors if they expand the board.
Ma has an 8.9 percent stake in Alibaba. Other investors in Alibaba include SoftBank Corp with a 34.3 percent stake and Yahoo Inc, which owns 22.5 percent.
In the updated filing, Alibaba said it needed to spin out Alipay and turn it into a domestic entity in 2011 to prevent delays in obtaining an operating license under newly issued Chinese regulations.
Alibaba spun out Alipay to a group that includes Ma, who holds a 46 percent stake in Alipay through another company, Zhejiang Alibaba E-Commerce Co. Alipay provides the lion's share of payment services for the company's retail marketplaces.
"This action enabled Alipay to obtain a payment business license in May 2011 without delay and without any detrimental impact to our China retail marketplaces or to Alipay," Alibaba said.
(This story corrects paragraph seven to reflect Ma's apartment had more than one room, in paragraph four changes 'million' to 'billion')
(Reporting by Deepa Seetharaman; Editing by Dan Grebler and Grant McCool)