WASHINGTON— Chinese e-commerce giant Alibaba says it is under investigation by U.S. regulators in connection with its accounting practices.
The company is the world’s biggest e-commerce platform, with more than 420 million people buying $485 billion worth of goods last year on its sites. Its digital platforms, including Taobao and Tmall, make up 80 percent of Chinese e-commerce.
Alibaba said in a regulatory filing Tuesday that the U.S. Securities and Exchange Commission has requested documents and information related to its policies and practices for consolidating earnings and for related party transactions, among other things.
The company said it is cooperating with the investigation. Alibaba said it was told by the SEC that the request for information shouldn’t be interpreted as an indication by the agency that the company has violated securities laws.
Alibaba Group Holding Ltd. went public in the U.S. in September 2014. Investors, seeking to tap into the rapidly growing Chinese middle-class, scrambled to buy shares. The offering raised $25 billion, making it the largest in the history of the New York Stock Exchange.
Alibaba’s e-commerce platforms cater to both Chinese and global consumers. At its heart is Taobao, a Chinese consumer-to-consumer website similar to eBay. Tmall offers merchants official storefronts to consumers in China.
As sales growth has slowed in China with a weakening economy, Alibaba has reached abroad to spur sales, both from U.S. companies selling goods on its platforms in China and Chinese sellers catering to international customers.
U.S. investors, worried about the state of the Chinese economy, have been wary of any possible signs of weakness in Alibaba’s performance. The company in January reported better-than-expected results for its third quarter, as mobile shopping continued to grow and Chinese customers snapped up goods during the holidays.
Alibaba said the SEC’s request also included information on accounting for its Cainiao Network and its reporting of operating data from Singles Day, the popular Chinese shopping holiday on Nov. 11.
SEC spokesman Kevin Callahan declined to comment Wednesday.
Friends Read Free