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Taiwan orders Alibaba withdrawal after rules violation: official

The logo of Alibaba Group is seen inside the company's headquarters in Hangzhou, Zhejiang province early November 11, 2014. REUTERS/Aly Song

By J.R. Wu TAIPEI (Reuters) - Taiwan has ordered Alibaba Group Holding Ltd to withdraw from the country within six months because the online retailer had violated investment rules required for a Chinese company, an economics ministry official said on Monday. Alibaba has been fined T$120,000 ($3,824) and must withdraw or transfer its holdings from its operation in Taiwan, Emile M.P. Chang, acting executive secretary for the Investment Commission, told Reuters. The commission falls under the Ministry of Economic Affairs and has authority over the review of Chinese investments in Taiwan. Chinese investments into the island are regulated strictly because mainland China is still considered a political enemy despite growing trade and economic ties since the late 2000s. China deems Taiwan a renegade province and has not ruled out the use of force to take it back, particularly if the island makes a move toward independence. Chang said the Investment Commission had been looking into the Alibaba situation since September and had requested documents from the company to clarify its shareholding, but those documents had not been provided. "We will actively communicate with the authority and provide the required supporting materials to comply with the latest requirements," Alibaba said in a statement late on Monday. "Since Alibaba Group, the parent company of Alibaba.com, went public in the United States last September, the authority took a different view about the internal structure of Alibaba Group and deemed it as a mainland Chinese company." The Chinese e-commerce giant entered Taiwan in 2008 through Singapore-registered Alibaba.com Singapore E-commerce Private Ltd, which Alibaba says established operations in Taiwan in accordance to regulations at the time. The company said it will continue to clarify the issues and, if necessary, will take proper actions to protect the legitimate interests of Alibaba.com Alibaba employs close to 100 people in Taiwan, a company official said. The company engages in business-to-business activities and runs its popular consumer e-commerce site Taobao in Taiwan. Taiwan did not allow Chinese investment or subsidiaries of Chinese companies to enter the island until 2009. Alibaba Chief Executive Jack Ma is due to give a speech to university students in Taipei on Tuesday. ($1 = 31.3900 Taiwan dollars) (Editing by Susan Thomas and David Goodman)