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Chinese e-commerce giant Alibaba’s shares plummeted on Tuesday after reports emerged that an individual surnamed “Ma” in the city of Hangzhou was detained on grounds of national security, raising concerns about the company’s founder Jack Ma.
The accused was placed under under “compulsory measures” on 25 April on suspicion of “colluding with overseas anti-China hostile forces” to “incite secession” and “incite subversion of state power,” according to China’s state broadcaster CCTV.
Alibaba’s Hong Kong-listed shares plunged 9.4 per cent, wiping out about $26bn of market value, after Chinese state media reported the detention of the individual surnamed Ma, reported Bloomberg.
Majority of the losses were erased after Hangzhou police said in a statement that the accused person’s name was spelled with three Chinese characters while Alibaba co-found Jack Ma’s Chinese name is the two-character Ma Yun.
Hu Xijin, the former editor-in-chief of Global Times, also said on Chinese social media platform Weibo that the reports were misleading as Jack Ma’s Chinese name, Ma Yun, has only two characters.
Later reports on the official WeChat accounts of Global Times and the Central Political and Legal Affairs Commission also changed the name of the individual to three characters instead of two, reported Think China.
The e-commerce giant founder had got into trouble with authorities in 2020 with his company facing several enquiries and setbacks in the aftermath after his scathing comments on China’s regulators.
The stock market reaction on Tuesday according to experts was a reflection of the highly sensitive nature of the issue.
Investors’ reaction “shows the relatively weak sentiment in the tech space”, Willer Chen, analyst at Forsyth Barr Asia Ltd, was quoted as saying by Bloomberg.
“I think the market is just a bit too sensitive on this.”
Meanwhile speculation has grown around whether the incident was manipulated.
Victor Shih, a political science professor at the University of California San Diego said to CNN that the episode was “odd”.
“I thought this was kind of an odd episode.”
“Whether that was a warning of sorts to the technology sector as a whole, or perhaps Jack Ma personally. Who knows? But it’s certainly demonstrated the government does not even have to arrest a senior technology executive to erase tens of billions of dollars from a company’s market valuation. It just needs to release some kind of information,” he added.