A Manhattan federal judge threw out two RICO charges in Kering's counterfeit case against Jack Ma's Alibaba.

The prominence Alibaba gained with its record-setting $25 billion initial public offering, along with its relentless growth and its geography-straddling structure, has powered a never-ending spotlight probing both the strengths and weaknesses of the Chinese web giant.

While much of that heat has emanated from charges the company enables counterfeiters with its marketplace, its accounting practices are now receiving additional scrutiny from the Securities and Exchange Commission.

The U.S. watchdog has asked for more information on how Alibaba accounts for its investment into the logistics provider Cainiao Network, its policies around related-party transactions and how it reports operating data from Singles Day.

Shortly after the Nov. 11 shopping holiday, which was pioneered by the company’s Tmall, Alibaba said the day generated gross merchandise volume of $14.3 billion, a 60 percent increase from a year earlier, for what it dubbed as “ the largest shopping day in history.” This year, the company declared itself the world’s “largest retail economy.”

“We are voluntarily disclosing this SEC request for information and cooperating with the SEC and, through our legal counsel, have been providing the SEC with requested documents and information,” the company said.

Investors sent shares of the Alibaba down 6.9 percent to $75.53 Wednesday, giving it a market capitalization of $186.6 billion.

Rob Sanderson, an analyst at MKM Partners, predicted that the market would digest the news quickly.

“People will forget about it next week, it will be gone,” Sanderson contended, stressing that this was a request for documents still and not a full-blown inquiry.

This type of scrutiny, though, might not go away anytime soon.

Sanderson said that for most Chinese companies, “There’s a reasonable degree of suspicion, concern, anxiety around the legitimacy of their reporting and for potential fraud, that’s sort of the undercurrent that comes with many of these companies.”

Alibaba has also come under the microscope — from the Chinese government, trade groups and brands — for how it deals with counterfeits on its marketplace.

“Anything that feels like it’s a shady business practice, that strikes a nerve with U.S. investors for Chinese companies,” Sanderson said. “It’s not surprising to me that the stock is down on this because it is the fear of the unknown.”

The analyst said its in Alibaba’s own economic interests to ensure that it’s on the straight and narrow.

“They’re a huge, huge player,” he said. “They control a giant ecosystem and they have a responsibility to fight bad guys, just like Visa and MasterCard [do on their own networks]. To the degree that there’s a higher amount of bad actors and bad activities in their ecosystem and that compromises the trust of the buyers and sellers in the ecosystem, that hurts them more than anybody.”

Alibaba, which is led by founder Jack Ma, provides a marketplace for buyers to reach sellers and doesn’t hold inventory of its own, operates less as a single entity and more as a network of affiliated companies with a broad range of interests — from financial services to entertainment to shipping.

How that structure works and is reported appears to be part of what the SEC is looking into.

Alibaba holds a roughly 47 percent stake in the logistics firm Cainiao. But the shipper’s results are not included with Alibaba’s own books.

Needham & Co. analyst Kerry Rice said, “The question is influence [over Cainiao]. It’s just kind of hard to determine where the SEC might fall on that.”

Alibaba’s own profit margins could fall if it had to, under U.S. accounting laws, incorporate Cainiao’s results into its own.

“This is an accounting issue, not an operational issue,” Rice said. “It’s not going to change the way they operate the company, I wouldn’t believe. I think it’s business as usual.”

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