Chinese online retail giant Alibaba, which has come under pressure from Chinese regulators on allegations of failing to crack down on the sale of counterfeit goods through its platform, now faces questions from the SEC over its dealings with China’s regulator.
The SEC has asked Alibaba for ‘background facts and other information’ related to its interactions with China’s State Administration for Industry & Commerce (SAIC) over allegations that counterfeit products are regularly sold over its websites, Alibaba says in a press release.
‘The SEC letter states it should in no way be construed as Alibaba Group having done anything wrong or there having been any violation of securities law,’ Alibaba says in the release. ‘We are committed to maintaining an open, transparent and co-operative relationship with all regulatory agencies and look forward to a constructive dialogue.’
The company adds that ‘although Alibaba Group has no obligation to disclose the receipt of the SEC correspondence, we have chosen to proactively disclose the request because we value being open with our investors and feel disclosure could help avoid false rumors or speculation.’
China’s SAIC has repeatedly accused Alibaba of being lenient about the sale of counterfeit goods through its websites and has threatened massive and repeated fines if the company doesn’t deal with the issue immediately. In the US, the company also faces lawsuits by investors that allege Alibaba failed to disclose serious risks in relation to the counterfeit goods issue before its IPO in September.
Alibaba Group executive vice chairman Joe Tsai said in a statement to analysts in January that an SAIC report alleging high levels of counterfeit goods on Alibaba websites was flawed and based on arbitrary methodology.
‘When you step back and look at our overall efforts to combat illicit activities, our track record is clear,’ he said. ‘We are certainly not perfect, and we have a lot of hard work ahead of us. In the global e-commerce marketplace there will always be people who seek to conduct illicit activities and, like all global companies in our industry, we must continue to do everything we can to stop these activities.’
