JD.com founder Richard Liu cashes out nearly US$1 billion from e-commerce giant after retreat from top job
- Liu has sold Nasdaq-listed JD.com stock and Hong Kong-listed JD Health shares worth a combined US$988 million since April
- Liu’s stock sales and retreat from a front-office role are in line with a technology sector trend amid months of regulatory scrutiny
JD.com founder Richard Liu Qiangdong has cashed out nearly US$1 billion from the e-commerce giant he founded since stepping down from the chief executive role in April, according to public filings, prompting speculation over what he may do with the proceeds.
In April and May, 49-year-old Liu sold 8.84 million shares in subsidiary JD Health worth about HK$440 million (US$56 million).
The move by Liu, one of China’s best-known tech entrepreneurs, has triggered speculation over the reasons for the sale, as the Chinese billionaire has previously been reluctant to cut his stake in JD.com.
At the World Economic Forum in January 2018, Liu said that he had “rarely” cut his ownership in the company because he thought that the stock price was too low. JD.com is currently trading about 50 per cent higher than early 2018.
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In addition to handing over the top role to Xu Lei this April, Liu has also stepped back from executive responsibilities at subsidiaries including JD Logistics and JD Digits.
China’s e-commerce sector has been buffeted by a regulatory crackdown and economic headwinds in the past year, with consumer sentiment also knocked by strict pandemic control measures. Beijing-based JD.com racked up sales growth of 10.3 per cent in the most recent 618 shopping bonanza, the slowest rate on record.
Separately, Liu is facing a civil lawsuit in the United States over the alleged rape of a Chinese student in the autumn of 2018. Minnesota prosecutors said in December 2018 that they would not be prosecuting Liu as there were “profound evidentiary problems which would have made it highly unlikely that any criminal charge could be proven beyond a reasonable doubt”.
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Court filings submitted ahead of the public hearing on June 24 show that Liu’s lawyers attempted to disassociate the company with the case by saying that Liu was not within the scope of his employment at the time he was accused of wrongdoing.
A jury trial is expected to be held on September 26 if both sides fail to reach an agreement about the suit.
JD.com declined to comment about the stock sale and the lawsuit.
