BEIJING — The turmoil is continuing for Alibaba.
The Chinese e-commerce giant revealed Friday that the U.S. Securities and Exchange Commission is asking for information about a meeting the company had last summer with a Chinese regulator over alleged questionable business practices. That meeting took place in July, only a few months before Alibaba’s record-breaking public offering in New York last fall.
Also on Friday, the National Development and Reform Commission, or NDRC, China’s antitrust regulator, said on its Web site that it is launching an investigation into possible unfair pricing tactics in China’s e-commerce sector. The statement did not list any specific companies the NDRC is targeting.
In regard to the SEC’s query, Alibaba said that it had received correspondence from the American regulator “asking for background facts and other information related to our interaction with one of our Chinese regulators” and that company is “cooperating with the SEC’s request.”
“Although Alibaba has no obligation to disclose the receipt of the SEC correspondence, we have chosen to proactively disclose the request because we value being open with our investors and feel that the disclosure could help avoid false rumors and speculation,” the firm said. “The SEC letter states it should in no way be construed as Alibaba Group having done anything wrong or there having been any violation of the securities law.”
At the end of January, China’s State Administration for Industry and Commerce, or SAIC, the government regulator that met with Alibaba last summer, released a “white paper” that said it raised concerns about the sale of fake products on the company’s e-commerce platforms but had withheld publishing that paper so as not to impact Alibaba’s IPO. The white paper was retracted after Alibaba agreed to cooperate with the SAIC.
Jack Ma, Alibaba’s executive chairman, said in a letter to employees published on his microblog on Friday, that the company, “will uphold the principles of objectivity, transparency and honesty” to deal with government inquiries as well as a number of lawsuits that have also been filed in the U.S. against the company over possible failure to disclose information about the Chinese regulator’s inquiries into Alibaba’s business practices prior to the IPO.
In response to the NDRC’s probe into business practices in China’s e-commerce sector, Alibaba said separately that the company “believes in maintaining a fair and equitable marketplace for buyers and sellers” and welcomes “measures that would help us achieve this goal.”
In recent weeks, Alibaba has been engaged in a high profile back-and-forth with Chinese ministries and officials. Also at the end of January, another regulator issued a separate report, which showed Taobao.com, Alibaba’s consumer-to-consumer platform, to have the worst record among China’s e-tailers for selling counterfeit products.
Last week, China’s General Administration of Quality Supervision, Inspection and Quarantine, said in a statement posted its Web site that a senior official with the agency told Ma during a meeting that Alibaba’s business practices are potentially damaging China’s reputation abroad and Chinese consumer confidence in shopping online.