JD shares fall most on record after CEO Liu accused of rape

Roman Schwartz
September 6, 2018

Two of the firms, Rosen and Schall, said in separate statements on Tuesday that the Nasdaq-listed company's comments defending its chief executive Richard Liu - also known by his Chinese name, Liu Qiangdong - may have misled investors, causing them to incur financial losses.

Liu, CEO of the second-largest Chinese e-commerce company after Alibaba, was detained in Minneapolis, Minnesota, where he spent last week as a Ph.D. student in a business administration program at the University of Minnesota's Carlson School of Management.

JD.com official Zhang Shuhan said Monday that Liu was back in China. "Liu has returned to work in China", JD said in statement released on Tuesday.

The Minneapolis p‌ol‌ic‌e department, however, has disputed the claim, saying that an investigation is ongoing and Liu was merely allowed to go free without bail or travel restrictions.

The disclosure adds detail about the accusation after police said previously he had been arrested on suspicion of criminal sexual conduct. On Tuesday, police released a report which said that Liu had been accused of "criminal sexual conduct - rape -completed".

On Tuesday, defence attorney Joseph Friedberg said, "They are not going to charge in this case".

According to the Minnesota Act, the maximum term for a first-degree sexual abuse offense is 30 years and the minimum is 12 years.

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The committee also took a shot at Alphabet CEO Larry Page , who declined an invitation to appear, by leaving out an empty chair. Republican Senator Marco Rubio said the company might have skipped the hearing because it was "arrogant".

Liu, who was born to a peasant family in East China's Jiangsu province, become one of China's richest men by establishing his e-commerce giant JD.com, which is listed in the USA with a market value of around $43 billion.

If the United States police accuse Liu, the company's share price would continue to fall, but it was predicted that there would not be a sharp crash due to an already sharp decline this year, Reuters quoted Danny Law, an analyst at brokerage Guotai Junan as saying.

Liu, who was identified by police by his Chinese name Liu Qiangdong, was arrested Friday night and released on Saturday.

Mr Liu has a net worth of $7.5bn now (£5.8 bn), according to Forbes.

"Negative publicity could also compromise JD.com's ability to attract worldwide brands to its marketplace, which has been a top focus of the CEO over the past two years or so", Sanderson said.

In June Google announced it would invest more than half a billion dollars in JD.com as part of a move to expand retail services around the world.

The case involved a person who had been a guest at a party hosted by Liu at his home in Sydney in 2015 who accused another guest of sexually assaulting her at a hotel.

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