Alibaba unit finds possible accounting irregularities

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IOL pic aug15 Alibaba signage at hq Reuters File picture: Chance Chan

Hong Kong - Alibaba Pictures Group Ltd, the recently formed film and TV unit of Alibaba Group, said on Friday it had found possible accounting irregularities and asked for its Hong Kong-listed shares to be suspended until further notice.

The announcement comes as e-commerce giant Alibaba Group is preparing for a US initial public offering that bankers and investors expect to surpass the $16 billion raised by Facebook Inc when it listed in 2012.

Alibaba Pictures used to be known as ChinaVision Media Group Ltd. Alibaba renamed it after completing on June 24 its $804 million purchase of a 60 percent stake in the company.

In a filing to the stock exchange, Alibaba Pictures said its new management had during a review found possible “non-compliant treatment of financial information” from before the Alibaba purchase. Last month, the company also issued a profit warning.

“The company is not yet in a position to comment on the potential impact on its current and historical financial affairs of the matters described above,” Alibaba Pictures said.

Alibaba, has ventured beyond its Internet roots with recent acquisitions into media, mapping technology and a stake in a football team.

Alibaba, whose platforms handle more goods than EBay and Amazon.com combined, and its affiliates have spent almost $10 billion on acquisitions since the beginning of 2013.

These deals include a $192 million purchase in June of China's most successful football club, the Guangzhou Evergrande, which was hatched over a few drinks.

Alibaba Pictures said it will delay the publication of its interim financial results while its audit committee completes an inquiry into the financial statements.

Shares of Alibaba Pictures last traded at HK$1.61 before they were halted on Friday. The stock has more than doubled since late February, prior to the announcement of Alibaba Group's investment. - Reuters


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