Focusing on the future

Richard Liu: civil claim settled

When JD.com boss Liu Qiangdong – better known as Richard Liu outside China – was accused of sexual assault in Minnesota four years ago, the share price of his New York-listed company tumbled. A picture of the founder of one of China’s largest e-commerce platforms in orange jail garb soon went viral on social media. Prosecutors declined to file criminal charges, however, citing “profound evidentiary problems”. Liu went back to China, while his wife headed for a study break at Cambridge University.

If these were the darkest months of Liu’s life, they are now finally over. Just 48 hours before a civil trial was set to begin in the United States this month, the billionaire and his accuser reached an undisclosed agreement. “The incident between Ms. Jingyao Liu and Mr. Richard Liu in Minnesota in 2018 resulted in a misunderstanding that has consumed substantial public attention and brought profound suffering to the parties and their families,” the parties said in a joint statement, explaining that they had set aside their differences and settled the dispute in order to avoid further pain and suffering.

Liu, who had been expected to testify at the trial, has consistently denied the allegations, saying the encounter was consensual.

Since that night in September 2018, he has rarely appeared in public. Liu has also relinquished his roles as chairman, legal representative or other senior management positions at more than 40 companies where he is a major stakeholder.

But that didn’t mean that the 49 year-old was preparing for an early retirement. Far from it: Liu has been working in hyperactive mode, says 36Kr.com, going back to the same punishing schedule he undertook during the early days of JD.com’s founding in 1998 (see WiC449).

Liu must have become a favourite of China’s investment banking community, for instance, as the JD group has been the most active of China’s internet majors in the capital markets, spinning off its logistics (JD Logistics) and internet healthcare (JD Health) units.

Add to that JD.com’s secondary listing in Hong Kong in 2020, and Liu has undertaken three major market fundraisings.

Another potentially lucrative IPO by the group’s fintech’s unit (JD Technology) had to be postponed in the face of a regulatory review (which also scuppered Ant Group’s IPO in late 2020 and forced a revamp at Alibaba’s fintech unit).

There was also a major overhaul of the JD group of companies, including staff lay-offs across a number of different business segments. The efforts at reintegrating the business divisions seem to be paying off. In a review published by the All-China Federation of Industry and Commerce last month, JD.com took the title of the country’s biggest private sector company for the first time. Growing its sales by nearly 28% to Rmb951 billion ($136 billion) in 2021, it seized top spot from telecom giant Huawei, which had headed the ranking for the previous six years.

Despite his personal legal challenges, Liu’s commercial empire seems to have navigated the lengthy crackdown from regulators on China’s ‘platform economy’ more successfully than rivals like Alibaba and Tencent as well. Indeed, JD even benefited from the darkening mood by adding new customers to its platforms after antitrust bosses fined Alibaba $2.8 billion and forced it to rescind some of its practices around merchant exclusivity, Bloomberg reported this year.

Despite declining this year, the price of JD.com’s shares in New York has nearly doubled since September 2018, when the allegations against Liu were first made. The growth of his wider group of companies since then has brought speculation to social media about the prospects should Liu decide to return more completely to the public spotlight.

In other good news for Liu he was spotted shopping with his wife in Minnesota shortly before the trial was due to begin. She was heavily pregnant.

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