JD.com’s shares fell on Monday after a report revealing the details of the night which lead to JD’s founder and CEO Richard Liu’s arrest on suspicion of rape. Shares of the Chinese e-commerce platform are at their lowest point since November 2016.
The Nasdaq-listed company opened 5% lower on September 24th falling close to 8%. The shares have not been this low for a year and a half: they finally closed at $24.51, down 7.47%. JDs shares have fallen more than 40% this year, according to Chinese media Wallstreet.cn.
The report published by Reuters includes a transcript of WeChat messages sent by the 21-year-old alleged victim to several friends. The woman’s lawyer Wil Florin verified that the text messages came from her.
“I was not willing,” she wrote in Chinese on the messaging application on August 31.
Liu’s lawyers have responded by saying that the report is not factual and that Liu did not commit any crimes.
“It is unfair for Reuters to publish a one-sided story right now when the case is still open and prosecutors are still considering the case,” Jill Brisbois, a lawyer for Liu told The Global Times on Tuesday after the publication.
The newest stock price hit does not come as a surprise: Liu holds nearly 80 percent of the voting rights in JD.com. The self-made billionaire is currently worth around $5.84 billion but that number has been sliding. The rape investigation added to JD’s woes which include second-quarter profit numbers which are eight times lower than analysts expected.
Liu was arrested on September 4th in the US by the Minneapolis Police on suspicion of rape. He was there as part of a doctorate program in business administration at the University of Minnesota’s Carlson School of Management. Sixteen hours later, he was released without bail or charges but not before Liu’s photos in an orange prison jumpsuit went viral on Chinese social media.
Three US-based law firms have announced investigations on behalf of JD.com’s shareholders on September 6th looking into whether the company issued misleading statements or failed to disclose information about Liu’s arrest.
Meanwhile, the police in Minneapolis announced that they have completed their investigation and that prosecutors should take the case. Under Minnesota law, Liu could face up to 30 years for the alleged crime. China does not have an extradition treaty with the US.