Alibaba Top Executive Detained By Chinese Authorities

Patrick Liu Chunning, the head of Alibaba Digital Entertainment Group, has been arrested over bribery allegations during his tenure as vice president of digital entertainment at Tencent Holdings.  Five other former employees of Tencent are being held by authorities as part of the investigation.

In Thursday’s statement release Tencent said, “An internal investigation brought to light bribery and corruption among some online video employees.” Alibaba commented on the matter via its Weibo stating, “We understand that Liu Chunning has been detained by the police due to bribery allegations during his time at Tencent Holdings; we are extremely shocked by the news. We support Tencent’s anti-corruption efforts and believe Tencent was being objective and fair regarding its report to the police.”

Alibaba further stated they would fully cooperate with authorities and provide legal assistance for Liu’s family. 

The news comes amidst an anti-corruption drive by Beijing named Operation Skynet (Sarah Connor?), which has been the most ambitious drive to clean up politics in China’s history. Liu joins scores of high-ranking generals, security chiefs, party officials, and other high profile executives from across the country that have been swept up by the initiative. 

Although this investigation is not directly related to Alibaba, Liu’s arrest may damage the company’s integrity at a time when Alibaba is fighting volatility in its stock performance. Alibaba’s stocks have fallen nearly 39 points from their all-time high of 119.15 back in November. The company’s market cap is $195.82 billion. Despite the concerns Liu’s arrest could have for Alibaba, analysts maintain a favorable outlook on the company’s stock.  

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EquityNet