Instrumental partner

Keen to try other roles by the early 2000s, Xie pushed for greater involvement in the e-commerce business, friends say, and eventually made management rotations that included leading Alibaba's analytics and corporate strategy teams and managing the important Chinese website.

Yet even as his position changed every few years, Xie's name remained a constant alongside Ma's in some of the most critical documents binding Alibaba's business.

Chinese companies traditionally require at least two shareholders; that has been particularly true of domestic firms holding restricted government licenses. Chinese laws also forbid foreign ownership of internet companies.

Who's who of Alibaba's inner circle

Alibaba starts NY investor session

As such, investors in Alibaba's New York-listed shares will in fact own stakes in a Cayman Islands-registered holding company that acquires its critical operating licenses, along with some of its revenue, from contracts with five Chinese firms known as variable interest entities (VIEs).

Besides the five companies that anchor Alibaba, Xie also holds an 11.6 percent stake in Zhejiang Alibaba E-Commerce, an affiliated company that contains Alibaba's payments processing and financial services arm, according to company filings as of March 31. The company is now called Zhejiang Ant Small & Micro Financial Services Group.

Zhejiang Alibaba controversially came into Ma's hands in 2010 after he voided its VIE contracts. Alibaba shareholders Yahoo Inc and SoftBank Corp vigorously protested the move, while Ma argued it was necessary to comply with anticipated Chinese central bank regulations governing foreign ownership of financial firms.

Xie has also been an instrumental partner for Ma in a variety of related party transactions. In April, Xie received a $1 billion loan from Alibaba to purchase a 20 percent stake in internet TV provider Wasu Media Holding – a move seen as part of Alibaba's strategy to break into the media industry. The same month, Xie and Ma paid 3.3 billion yuan ($538.4 million) for a 20.6 percent stake in China's biggest financial software firm, Hundsun Technologies.

"He's there because Jack (Ma) wants him there," said Drew Bernstein, managing partner for the China affiliate of the accounting firm Marcum Bernstein Pinchuk. "Jack must have some respect for him. He must have felt he belongs there, for things he contributed in the past, or what he can contribute in the future."

In its latest investor prospectus, Alibaba warned that Ma and Xie, given their joint investment activity, "may not act in our best interest" and that the company would incur substantial costs in the event Xie fails to repay his loan.