Updated from Sept. 13 with additional information.

Founder and executive chairman of Alibaba Group (BABA) - Get Report Jack Ma will sell up to 16 million shares of the Chinese e-commerce giant's stock over a 12-month period starting in October, StreetInsider reports.

The sale of the 16 million shares represents approximately 9% of the holdings that Ma owns, and are to be sold by JC Properties Limited and JSP Investment Limited, two companies affiliated with Jack Ma, as well as The Jack Ma Philanthropic Foundation. At current prices, the 16 million shares are worth about $2.8 billion.

Shares of the Chinese internet giant were lower in after-hours trading on Wednesday following the report, and were trading down 0.9% to $177.38 on Thursday morning. The stock is up more than 100% this year.

The transaction is in accordance with the pre-arranged sale of shares under Rule 10b5-1 of the Securities and Exchange Act of 1934. The rule entitles corporate executives to pre-arranged stock trading tactics in order to reach commitments and wealth planning requirements, the report said.

Rule 10b5-1 is also enacted over a designated period of time to diminish any market influence and avoid conflicts related to whether they had material, non-public knowledge about the company.

Joseph C. Tsai, Alibaba's executive vice chairman, also announced a pre-arranged sale of up to 5.5 million shares of the company, also to be carried out over a 12-month period starting in October. The shares represent about 8% of Tsai's holdings in the company, and are worth $976 million at current prices. The shares are to be sold by PMH Holding Limited and Parufam Limited, two companies associated with Tsai, and the Joe and Clara Tsai Foundation, Tsai's philanthropic foundation.

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