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Alibaba

Alibaba discovers possible accounting irregularities in recent acquisition as it gears up for bumper IPO

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By Cameron Clarke | Editor

August 16, 2014 | 2 min read

Chinese online retailer giant the Alibaba Group, which has been tipped to raise as much as $20bn in a New York IPO, has announced that it has it discovered suspicious accounting at one of its acquisitions.

Alibaba has been on an acquisition drive this year and it is one of its recent purchases, a Hong Kong film company that it bought for about $800m two months ago, that is now facing scrutiny.

Alibaba Picture Group Ltd said on Friday that it had found possible "non-compliant treatment of financial information".

The New York Times said one of the main questions will be whether Alibaba fully vetted the acquisition, which was completed on June 24.

The paper continued: "The issue could complicate Alibaba’s efforts to court investors for its anticipated initial public offering of stock, which could be the biggest in American history."

Alibaba pictures said it is "not yet in a position to comment" on the potential impact on its current and historical financial affairs.

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