Alibaba Group Holding Ltd.BABA has decided to provide legal support to Patrick Liu, president of its digital entertainment unit, after he was detained by the police.
However, in a statement on its microblog Alibaba stated that it has ensured Liu's absence will not hamper Alibaba Pictures' business. Liu is also an executive director of Alibaba Pictures.
Reason for Liu's Arrest
On Thursday, Alibaba stated that Liu's arrest had nothing to do with his role at the company.
In the past, Liu had been a vice president at Chinese Internet company Tencent Holdings Ltd. TCEHY . In 2013, Tencent won a lawsuit against Liu in a non-compete case, following which he left to join Alibaba.
According to Tencent, the Chinese authorities have detained five to six former employees of the company, as part of a graft investigation following an internal company probe.
"An internal investigation brought to light bribery and corruption among some online video employees... The police have been notified and we are waiting for the results," Tencent clarified.
Bloomberg also said that Liu did not reply to the e-mails seeking comment.
Bottom Line
As a result of China's anti-corruption drive, many officials at different levels of government and a number of company executives have been detained. In our view, this might be a blessing in disguise as it will actually increase investors' confidence in the Chinese stock market.
Alibaba currently has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the industry are Autobytel Inc. ABTL and Blue Nile Inc. NILE . Both of them sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
BLUE NILE INC (NILE): Free Stock Analysis Report
TENCENT HOLDING (TCEHY): Free Stock Analysis Report
AUTOBYTEL INC (ABTL): Free Stock Analysis Report
ALIBABA GROUP (BABA): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
