Possible financial irregularities found at Alibaba's Hong Kong-listed film unit
The newly installed management of Alibaba Pictures Group has found possible breaches of the financial accounts dating before Alibaba Group’s move to take a majority stake in the entertainment company.
The new management, appointed by Chinese technology giant Alibaba Group, undertook an initial review of the company’s financial and business affairs, Hong Kong-listed Alibaba Pictures said in a filing to the stock exchange on Friday morning.
“The new management has identified certain possibly non-compliant treatment of financial information in the company’s accounting records covering periods prior to completion of the [investment by Alibaba Group],” Alibaba Pictures said.
“In addition, the new management is of the preliminary view that insufficient provision for impairments of certain assets for the six months to June 2014 is likely to have been made.”
As a result, Alibaba Pictures warned the publication of the company’s interim earnings report was likely to be delayed.
The film and television company was previously called ChinaVision Media Group, but changed its name on June 30, days after Alibaba Group completed its acquisition of a majority stake in the company.
Shares in Alibaba Pictures have been suspended since 9am on Friday.