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Affair allegations involving senior Alibaba exec lead to misconduct speculations

The share price of Ruhnn, the celebrity incubator also involved in the scandal, dived 6.3%.

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Jiang Fan, the president of Alibaba’s (NYSE: BABA) B2C business Tmall and C2C business Taobao, apologized Saturday to the company and his colleagues after rumors on Weibo surrounding his personal life have negatively impacted Alibaba, 36Kr reported.

Jiang, who at 35 is the youngest c-suite member of Alibaba, has also asked the company to start an internal investigation on him in a message posted on the e-commerce company’s internal communications platform, later accessed by 36Kr.

While Jiang did not specify what comments, rumors, or type of investigation he was referring to, one cryptic message last Friday on Weibo set off public curiosity and complaints about a supposed cover-up by his employer.

A Weibo user with the username Huahuadonghuahua warned Zhang Dayi, an online celebrity and key shareholder of online celebrity incubator Ruhnn (Nasdaq: RUHN), to “stay away” from her husband.

“This is the first and last time that I warn you. Do not court my husband any more as I am not someone easy to handle. Please respect yourself and conduct yourself well, ” she said, tagging Zhang.

Although Huahuadonghuahua had less than 30,000 followers, the post quickly gained attention from Chinese media outlets such as ifeng.com, whose entertainment section suspected her husband was Jiang, citing unnamed people close to the matter.

Soon after their publication, ifeng’s original story and Huahuadonghuahua’s original posts were both deleted for unknown reasons. Because both Weibo and Ruhnn share one well-known backer⁠—Alibaba⁠—the matter quickly entangled Jack Ma himself.

Weibo users soon peppered Ma’s Weibo channel with complaints about supposed censorship. While some Weibo users doubted Alibaba was involved in the deletion of posts related to the matter, some key online opinion leaders suggested  Jiang’s personal conduct could have created an inappropriate entanglement in Alibaba’s investment in Ruhnn.

Alibaba invested RMB 300 million in the company in 2016, taking a 8.56% stake of Ruhnn, while Zhang holds a 15% stake, according to the company’s initial public offering prospectus filed in May 2019. Ruhnn raised USD 125 million it its IPO but closed at USD 7.85 on Wednesday, its first trading day on Nasdaq, down by 37.2% from its IPO price of USD 12.5.

Following the kerfuffle, the price of Ruhnn’s shares dived 6.36% on Friday to USD 3.83. There is no public information showing Alibaba has sold its stake in Ruhnn, indicating the company has suffered a loss of RMB 100 million (USD 142 million) on paper as Ruhnn’s market capitalization stands around USD 316.8 million after the move.

Alibaba closed at USD 209.5, down by 1.5% on Friday, and has not replied to KrASIA’s request for comments on the matter.

36Kr is KrASIA’s parent company.