Financial News

  • 18 August 2014, 6:35

Alibaba Film Unit Probes Cash Irregularities

The film unit recently acquired by Chinese e-commerce powerhouse Alibaba has announced an investigation into possible accounting irregularities.

Alibaba Pictures Group confirmed the news to the Hong Kong Stock Exchange and said the probe's scope pre-dated its purchase by Alibaba in June and only related to its time as ChinaVision Media Group.

Trading in Alibaba Pictures shares was suspended pending the results of the inquiry while the group's latest financial results were also delayed.

The disclosure was made as its parent company readies for what is expected to be the biggest-ever listing by a tech firm.

It is believed Alibaba will look to raise $20bn (£12bn) in its planned initial public offering in New York next month - more than Facebook's $16bn two years ago.

Alibaba - which has made a string of big-money purchases to broaden its interests - makes more money than Amazon and eBay combined.

It bought 60% of ChinaVision Media for more than $800m as part of its push into online content and changed its name to Alibaba Pictures.

The statement to the Hong Kong stock exchange said the new management team had found "certain possibly non-compliant treatment of financial information" in the company's accounts.

The film business said the discrepancies meant it was likely that there had been "insufficient provision for impairment of certain assets" in the January-June period - potentially valuing assets at more than they are worth.

An audit committee is investigating whether it would affect the company's previous financial reports.

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