Summary:

The Alibaba-Yahoo (NSDQ: YHOO) “he says, she says” continues: Yahoo, which already had an embattled relationship with Chinese e-commerce gia…

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The Alibaba-Yahoo (NSDQ: YHOO) “he says, she says” continues: Yahoo, which already had an embattled relationship with Chinese e-commerce giant Alibaba, in which it owns a 39 percent stake, says that Alibaba handed off a critical unit without its knowledge. In a statement, the company says it was notified on March 31 of two transactions that occurred “without the knowledge or approval of the Alibaba Group board of directors or shareholders.” Those included the transfer of 100 percent of the shares in huge online payment company Alipay to a company controlled by Alibaba’s CEO.

Not so fast, says Alibaba, which says that it’s not true that the hand off happened without the knowledge of the Alibaba board, which includes Yahoo co-founder Jerry Yang. In a statement of its own issued today, the company says that the Alipay situation was discussed at “numerous board meetings” and that board members were told in July 2009 that Alipay had been transferred over.

(If this back and forth sounds very familiar, that’s because Yahoo and Alibaba issued similar contradicting statements last fall about whether or not Alibaba had repeatedly approached Yahoo about buying back Yahoo’s shares in the company).

No matter which side is correct, the handoff is raising more eyebrows among investors about the state of Yahoo’s very valuable Asian holidngs. In a report this morning, Citi’s Mark Mahaney says the relationship between the two companies is “deteriorating” and that it’s possible that Yahoo could ultimately have to sell its stake in Alibaba at below market prices.

Jordan Rohan at Stifel Nicolaus says the tussle raises “trust issues” including why Yahoo did not disclose the handoff closer to when it learned about it: “If Bartz knew about the transfer of ownership, didn’t she have an obligation to disclose it as soon as possible? Most would argue that this transaction was quite material. If Bartz was in the dark about these undertakings, why wasn’t more careful oversight in place?”

Yahoo’s stock, which dropped earlier this week when Yahoo first disclosed that Alibaba had shed Alipay, has continued to fall today and is now down 11 percent over the last five days.

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