JD.com founder arrested over sex claim, then freed

Mr Richard Liu has returned to China and JD.com said the sexual misconduct accusation against him was unsubstantiated.
Mr Richard Liu has returned to China and JD.com said the sexual misconduct accusation against him was unsubstantiated.

BEIJING • The billionaire founder of JD.com, one of China's largest and most successful online retailers, was arrested last Friday in the United States over alleged sexual misconduct before being released a day later, police records show.

Mr Liu Qiangdong - known as Richard Liu in the English-speaking world - is back in China and JD.com said the accusation against him was unsubstantiated.

"He has been released without any charges, and without requirement for bail. Mr Liu has returned to work in China," the company said in a brief statement late yesterday, referring further questions to two US-based lawyers representing Mr Liu, 45.

Minnesota police said an investigation was ongoing and it was not clear if he will be charged.

In addition to making Mr Liu the highest-profile Chinese businessperson to be accused publicly of sexual misconduct, the case has raised concerns that loss-making Nasdaq-listed JD.com could face difficulties making decisions due to its unusual governance structure.

The company is backed by Walmart, Alphabet's Google and China's Tencent Holdings.

JD.com's rules require Mr Liu, who holds nearly 80 per cent of the company's voting rights, to be present at board meetings for the board to make decisions, but it was not immediately clear if he has to be physically present or could participate by teleconference.

The Financial Times, citing two people with direct knowledge of the matter, reported that the case involved Mr Liu, who is a student in the University of Minnesota's doctor of business administration programme, and a Chinese student at the university.

While the doctoral programme primarily takes place in Beijing in partnership with the prestigious Tsinghua University, the students were in the Twin Cities last week as part of their training.

 

According to its website, the programme is designed for top-level executives working in China, and the average age of participants is 50.

JD.com, one of China's tech heavyweights, competes with larger rival Alibaba Group, and Mr Liu has a net worth of US$7.9 billion (S$10.8 billion), according to Forbes.

The company, worth some US$45 billion, has seen its stock lose 24 per cent of its value this year amid concerns of weakening growth momentum. JD.com has been in and out of the red for the past year and last month reported a second-quarter net loss of US$334.4 million, reflecting increased investment.

Mr Liu built JD.com from scratch. In 1998, he spent 12,000 yuan of his savings to lease a 4 sq m retail space in Beijing's technology hub of Zhongguancun, setting up a firm that would become JD.com.

He is also known for his marriage to Chinese Internet celebrity Zhang Zetian.

NYTIMES, REUTERS

A version of this article appeared in the print edition of The Straits Times on September 04, 2018, with the headline 'JD.com founder arrested over sex claim, then freed'. Print Edition | Subscribe