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JD.com averts crisis as CEO cleared in rape probe
JD.COM Inc avoided the biggest crisis in its history after US prosecutors decided not to press criminal charges against its billionaire founder, freeing China's No 2 online retailer to resume pursuing its global ambitions.
Chief executive officer Richard Liu won't be charged in connection with a rape investigation in Minneapolis, ending a months-long probe that made global headlines and cast doubt over JD's leadership.
On Friday, JD gained 5.9 per cent to US$21.08 - still well below roughly US$30 before the CEO's arrest became public.
Mr Liu, who controls a majority of the US$35 billion company's voting rights, was arrested on Aug 31 and accused of raping a 21-year-old female Chinese undergraduate student.
The 45-year-old CEO was completing the American residency of a US-China business administration doctorate programme at the university's Carlson School of Management at the time. The potential charges had wiped out about US$15 billion of market value - almost a third of JD.com's capitalisation - since September.
Mr Liu, whose outsized control tied the firm's fate to his own, is regarded as the driving force behind one of China's most successful Internet companies.
Formal charges would have made running the company increasingly untenable for Mr Liu, whose business is backed by Tencent Holdings Ltd.
Unlike rival Alibaba Group Holding Ltd, which runs a marketplace for merchants, JD earns about 90 per cent of its revenue through direct online sales and the CEO regularly travels the world striking agreements with suppliers.
"As we reviewed surveillance video, text messages, police body camera video and witness statements, it became clear that we could not meet our burden of proof and, therefore, we could not bring charges," Hennepin County Attorney Mike Freeman said in a statement on Friday.
The three-month period it took to make a decision had "nothing to do with Liu's status as a wealthy, foreign businessman".
The billionaire, who became a household name in his native China, held a keynote panel at this year's World Economic Forum in Davos.
In China, JD is the equivalent of a combined Amazon, Federal Express and Visa. It has operations in Thailand and Indonesia, and plans to enter Europe.
For the US market, Mr Liu has said he wanted to partner with the likes of Google and Walmart.
He has avoided speaking in public since the allegations surfaced, skipping events including the Chinese government-backed World Artificial Intelligence Conference, where he was set to be a speaker. "We are pleased to see this decision," JD.com said on its website.
Wil Florin, the woman's attorney, blasted Mr Freeman and his prosecutors, saying they never reached out to her or her lawyers during the investigation.
In a text message, the lawyer suggested she may pursue a civil suit: "A civil jury will determine whether Mr Liu, JD.com and their representatives should be held accountable."
Mr Liu's arrest triggered a mixed response back home. While a substantial faction believed the accusations against him were trumped up, the China Women's News, affiliated with the All-China Women's Federation, wrote on its WeChat account: " Liu did not violate the law, which is the judgment of the legal level.
"But there is morality behind the law. As a public figure, he should have higher requirements for words and deeds." BLOOMBERG