UPDATE 1-China asks Alibaba to dispose of media assets - WSJ

Adds SCMP CEO letter to employees

March 15 (Reuters) - China's government has asked Alibaba Group Holding Ltd BABA.N 9988.HK to dispose of its media assets, the Wall Street Journal reported on Monday, citing people familiar with the matter.

Discussions over the matter have been held since early this year, the report said, adding that officials were shocked at how expansive Alibaba's media interests have become. (https://on.wsj.com/3bNueCr)

The company, whose mainstay business is online retail, has stakes in the Twitter-like Weibo platform and several news outlets including Hong Kong's South China Morning Post.

Such influence is seen as posing serious challenges to the Chinese Communist Party and its own powerful propaganda apparatus, the Journal's sources were quoted as saying.

Alibaba did not immediately respond to Reuters request for comment.

In a Tuesday letter to South China Morning Post employees seen by Reuters, the newspaper's CEO Gary Liu said "Alibaba's commitment to SCMP remains unchanged and continues to support our mission and business goals."

(Reporting by Sophie Yu and Tony Munroe in Beijing and Akanksha Rana in Bengaluru; Editing by Ramakrishnan M. and Kim Coghill)

((akanksha.rana@thomsonreuters.com; ; Twitter: @AkankshaRanaa;))