The share price of JD.com has plummeted, after Richard Liu, the chief executive of the company, was accused of sexual assault. He was arrested last week in the United States of America. £5.5 billion was wiped off the value of the shares of the firm.
Liu was held for 16 hours as the Minneapolis police started an investigation into the sexual misconduct allegation before he was released later without charges.
Since then, the 45-year-old internet entrepreneur has left the United States and returned to China. The police said that the investigations regarding the matter are still on-going.
Liu has denied any wrongdoing. However, the e-commerce giant that is based in Beijing, has observed its share prices decline by 16 percent as a response to the developments. JD.com specialises in artificial intelligence and high-tech drones.
In a statement, the company said that he continues to be in charge of the firm, and that there should no effect on the day-to-day running of JD.com.
Alongside the nature of the said accusations, one of the primary concerns for shareholders is the significant level of control that Liu has over the firm.
Approximately 16 percent of the company is owned by Liu. According to Reuters, He also controls approximately 80 percent of the votes. He also introduced a provision which would prevent the board from making decisions unless he remains as a director and is present when the decisions are made.
Thus, it is feared that his level of influence would prevent the board from making any decisions without his presence, even if he were to end up in jail.
This is not the first time in recent months that JD.com has been featured in the news, as the commercial titan reported a loss that amounted to £262.8 million for the three months since April, which exceeded even the pessimistic forecast of Reuter’s that amounted to £136.5 million.