JD.com shares plunge in US trading after billionaire CEO Richard Liu’s arrest on sexual misconduct claim

Celia Chen
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JD.com shares plunge in US trading after billionaire CEO Richard Liu’s arrest on sexual misconduct claim

JD.com’s shares plunged to a 19-month low in US trading on Tuesday as investors weighed the possible impact of billionaire founder Richard Liu Qiangdong’s weekend arrest in the United States on suspicion of criminal sexual conduct, a term that covers a range of non-consensual sexual acts.

The company’s American depository receipts fell 6 per cent to close at US$29.43 in Nasdaq trading, the lowest share price since February 2017, on what was the first day for the markets after Monday’s Labour Day public holiday.

JD.com’s billionaire founder Richard Liu back in China after US arrest

Liu returned to JD.com’s headquarters in Beijing on Tuesday morning, days after being released from a holding cell in Minneapolis, Minnesota. He was back at work for the signing of a strategic partnership with Chinese textile manufacturer Ruyi Group.

JD.com released a group photograph showing its chairman and chief executive smiling, flanked by Qiu Yafu, chairman of Ruyi and executives from both companies.

Liu, 45, has yet to make a personal statement regarding the night of August 31, which he spent in custody in Hennepin County, Minnesota.

He was in Minneapolis to take classes at the University of Minnesota, where he was enrolled at the university’s Carlson School of Management to complete the American residency of a US-China business administration doctorate programme.

Back in China, Liu has some high-profile appearances scheduled in the weeks ahead.

Who is Richard Liu? Chinese billionaire seeks to raise profile as JD.com expands outside China

He is listed as an attendee at the AI World 2018 conference later this month in Shanghai, alongside other corporate chieftains including Tencent Holdings chairman Pony Ma Huateng, Baidu chairman Robin Li, Xiaomi chairman Lei Jun and Alibaba Group Holding executive chairman Jack Ma Yun.

Liu is scheduled to travel to Hong Kong in November for a luxury forum, according to a company representative.

Police have not outlined specific accusations against Liu, according to lawyer Joseph Friedberg, whom JD.com confirmed as representing the billionaire.

Friedberg said that his team was awaiting details from the authorities before deciding on the next steps, and that he did not think there would be charges filed, according to media reports.

Liu and his wife, Zhang Zetian, are one of the most high-profile couples in China’s business circles. Zhang shot to fame after their marriage and is known in China “Sister Milk Tea” after a photo of her in her schooldays holding a cup of milk tea.

The couple have a young daughter and are frequently seen together in public.

Neither Liu nor Zhang have posted on their verified Weibo social media accounts since the arrest.

Zhang, who has 1.5 million followers on Weibo, has not posted since May 31. The last posting on Liu’s Weibo account was on June 19, about the company’s unmanned delivery drone, a day after its “618” shopping festival.

News of the arrest came after Liu was identified in July as the host of a 2015 party in Sydney, Australia, where a guest was found guilty of sexually assaulting a model he met at the gathering. Liu was not accused of any wrongdoing.

JD.com chief released after US arrest over sexual misconduct claims

Tuesday’s slump extends the decline this year to 30 per cent. Liu has an estimated net worth of US$7.3 billion, according to a wealth index calculated by Bloomberg.

JD.com, an online shopping platform, posted a net loss in the quarter that ended in June that was about eight times larger than analysts expected, due to increased spending.

The company faces increased competition not just from established rivals like market leader Alibaba, which owns the South China Morning Post, but also from relative newcomers like Pinduoduo, which has gained market share by selling low-priced items through a combination of group buying and social media.

Additional reporting by Jodi Xu Klein

This article JD.com shares plunge in US trading after billionaire CEO Richard Liu’s arrest on sexual misconduct claim first appeared on South China Morning Post

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