Shares of Chinese e-commerce giant JD slumped 7.47 percent to $24.51 on the Nasdaq Stock Market on Tuesday, after Reuters reported more details about sexual assault allegations against the company's founder and CEO Liu Qiangdong.
In a report on Monday, Reuters said a 21-year-old University of Minnesota student sent a WeChat message to a friend in the middle of the night. She wrote that Liu had forced her to have sex with him at her apartment after a dinner party.
"I was not willing," she wrote in Chinese on the messaging application around 2 am on Aug 31, according to Reuters. "Tomorrow I will think of a way to escape," she wrote, as she begged the friend not to call the police.
Media reports say Liu was arrested on Aug 31 in Hennepin County on suspicion of rape. He was released without bail the following afternoon and then returned to work in China.
The Minneapolis Police Department turned over the findings of its initial investigation into the matter to local prosecutors on Thursday.
The prosecutors will review the evidence and decide whether to bring charges against Liu, said County Attorney Mike Freeman. There is no deadline for making a decision, and the office said it would have no further comment in the meantime.
Jill Brisbois, a lawyer for Liu, said Liu maintains his innocence and has cooperated fully with the investigation. "These allegations are inconsistent with evidence that we hope will be disclosed to the public once the case is closed," Brisbois wrote in a response to Reuters.
Loretta Chao, a spokeswoman for JD, said that when more information becomes available, it will become apparent that the information in this note doesn't tell the full story.
Shen Meng, director of boutique investment bank Chanson & Co, said: "If Liu, as the actual controller of JD were judged to be guilty, the daily operation of JD will be heavily affected."
"Liu's affair in US set off alarm bells among Chinese companies which are listed in the US stock market," said Shen, adding that their senior management staff should speak and act cautiously.
JD is the second-largest e-commerce website in China after Alibaba Group Holding Ltd, and has attracted investors such as Walmart Inc, Google Inc and Tencent Holdings Ltd.
Liu owns 15.5 percent of JD's stock and controls nearly 80 percent of the company's voting rights. The company reported its net income amounted to 122.3 billion yuan ($17.8 billion) in the second quarter of the year, an increase of 31.2 percent year-on-year, while its net profit dropped to 478.1 million yuan, down 51.04 percent compared with the same period last year.
Liu, who is enrolled as a student with the Carlson School of Management's doctor of business administration China program, was in Minneapolis to attend a residency from Aug 26 to Sept 1.