JD.com stocks fall and lawyers circle following CEO's rape investigation
JD.com stocks have tumbled and the company may face class action lawsuits from US firms, after it emerged chief executive officer Richard Liu was arrested on a rape accusation in the US.
JD.com's chief executive officer Richard Liu / JD.com
Last week, the Chinese billionaire, known by his Chinese name Liu Qiangdong, was arrested on what was initially reported to be an act of sexual misconduct. This has now been confirmed by police to be a first-degree rape charge, a felony offense which carries a penalty of up to 30 years imprisonment.
The matter is being investigated by the Minneapolis Police Department and no charge has been made.
JD.com shares have fallen sharply following the news, reaching a 19-month low in the US. Meanwhile, several US law firms have released statements claiming they may launch class action lawsuits on behalf of JD.com shareholders.
The law firms are investigating whether JD.com issued false or misleading statements and failed to disclose information to investors regarding Liu’s arrest.
Liu holds 16% of JD.com shares, however, a dual stock system means he controls nearly 80% of voting rights, giving him a huge level of influence and power over the company.
Liu was arrested on 31 August and held overnight before being released after no charges were filed. He has denied any wrongdoing and has now returned to China.
The billionaire was in the US to study at the University of Minnesota as part of a US-China business administration doctorate programme.
Liu’s arrest comes months after the billionaire was linked to a high profile sexual assault case in Australia, which was alleged to have happened after a party hosted by Liu at his Sydney penthouse in 2015. Liu was not involved in the incident and was not accused of any wrongdoing in the case.
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