What happened: Police records show that CEO of Chinese e-commerce platform JD Richard Liu was arrested for alleged first-degree rape in the US. Liu was in the country as part of a residency for US-China business administration doctorate program at the University of Minnesota. No charges have been filed against the billionaire businessman, but Minneapolis police have said the investigation is ongoing.
Why it’s important: Under Minnesota law, Liu could face up to 30 years for the alleged crime. JD shares have also been affected, with investors becoming wary of the investigation’s impact. As a result, the company’s stock price plunged to a 19-month low in US trading on Tuesday (Septemeber 4). The investigation adds to JD’s woes which include second-quarter profit numbers which are eight times lower than analysts expected. Additionally, the company has been facing increased competition in the e-commerce sector as a result of the rapid rise of newcomers like Pinduoduo.