Alibaba Group Holding Ltd. (BABA) - Get Report shares slumped lower Thursday as Chinese regulators set their sights on Asia's most valuable tech company in their latest attack on the financial empire of billionaire Jack Ma.
China's State Administration for Market Regulation launched its probe into Alibaba, and demanded a meeting with officials from its affiliate Ant Group Co., amid a broader push to tackle anticompetitive practices in internet commerce, including the alleged pressuring of merchants to list their goods on a single online platform.
The investigation follows last month's dramatic suspension of the planned $37 billion IPO of Ant Group and the summoning of billionaire Ma by government officials, as well as the People's Bank of China, to "provide views regarding the health and stability of the financial sector".
The Shanghai Stock Exchange said Ant's recent disclosure regarding regulatory changes in its key markets is a significant development that could mean it has failed to meet pre-set rules for providing timely information.
"Today, Alibaba Group has received notification from the State Administration for Market Regulation that an investigation has been initiated into the Company pursuant to the Anti-Monopoly law," Alibaba said in a statement published Thursday. "Alibaba will actively cooperate with the regulators on the investigation."
Alibaba's U.S.-listed shares were marked 11.6% lower in early trading Thursday to change hands at $226.40 each. Its Hong Kong-listed shares slumped 8.13% to close at the lowest level since early July.
Alibaba is also facing pressure in the United States, with President Donald Trump signing off on legislation last week -- The Holding Foreign Companies Accountable Act -- that could remove China-based companies from U.S. stock exchanges if they don't comply with American auditing standards.