Beijing: One of China's best-known tech tycoons has given up direct ownership and executive roles in various entities under the business empire he founded nearly 25 years ago, following an abrupt end to a protracted legal battle over a rape allegation in the US.
Since September, Richard Liu Qiangdong, the founder of JD.com and the world's 155th-richest person, with an estimated net worth of US$10.8 billion, has sold 45 of his shares in each of the four companies he owned, according to the most recent corporate filings. percent stake has been given up. The company's investment, logistics and healthcare subsidiaries.
According to the filing, for "administration efficiency purposes," the equity was transferred to Miao Qin, vice president and head of JD's life and services business division, since Liu, a non-executive director, was no longer involved in the day-to-day operations. Arranging the day to day operations of JD and hence the signing of corporate documents was challenging.
The most recent action comes after Liu, 49, relinquished his CEO position in April to longtime friend and business veteran Xu Lei. It was one of the entrepreneur's most famous moves to free himself from the daily grind at JD.
Li Chengdong, founder and chief analyst at Beijing-based tech consultancy Dolphin, said Liu is currently mainly absent from China and that his absence could make routine administrative tasks such as document signing difficult.
He added that JD can continue to operate normally without Liu's heavy presence as it is an established group.
JD did not respond to a request for comment on this article.
Liu had not been seen in public since last month, when a photo of him with his pregnant wife, Zhang Zetian, in a Minneapolis, Minnesota, grocery store surfaced online.
A Chinese student filed a civil rape case against him in 2019, but just before the trial began, a settlement was reached, releasing Liu from the need to give evidence.
After the rape allegation first surfaced in 2018, Liu began leaving his corporate and honorary positions, which resulted in his brief detention by Minneapolis police.
He eventually returned to China and was never charged with a crime, but he did give up his membership in the Chinese People's Political Consultative Conference, the highest political honor for any businessman.
Liu left his position as JD's chairman in September 2021, and Xu assumed responsibility for "the day-to-day operations and collaborative development of the various business units". JD said at the time that Liu would spend more time "formulating the company's long-term strategies".
Also Read: New smart helmet is designed for delivery riders
According to some analysts, Liu is following in the footsteps of several Big Tech founders who have stepped down due to China's regulatory crackdown on the sector but have somehow managed to retain control.
According to a November 2017 article in the Post, Zhang Yiming, the founder of TikTok's owner ByteDance, continues to have significant influence over the company's strategic decisions, despite handing over his position as CEO and board member to his college roommate Liang Rubo last summer. Is. ,
According to Kim Chang-hyun, assistant professor of strategy at China Europe International Business School in Shanghai, Liu's recent transfer of equity interests may not result in dilution of his controlling rights in JD.
JD has a dual-class share structure, which is preferred by tech founders because it allows them to effectively control only one particular class of shares with superior voting rights.
JD is listed on both the Nasdaq and the Hong Kong Stock Exchange.
This is a typical strategy that group founders often employ, according to Kim.
Despite only owning a 14% stake in JD, Liu was listed in its prospectus as having 78% total voting rights when JD applied for a dual primary listing on the Hong Kong Stock Exchange in June 2020.
Liu left executive positions at about 230 companies under his vast empire in the same year, according to business data, and he will leave another 18 in 2021.
Liu earned 6.6 billion yuan ($930 million) in the first half of this year from selling his personal stake in JD Health and American depository shares obtained through a company called Max Smart.
Currently, Liu still holds executive positions in 33 companies, while he once held 333 executive positions. By the end of March this year, Liu still held 76% of the total voting power in the JD, only two percentage points less than two years ago.
It is almost impossible for anyone to question Liu's business decisions because other JD executives, such as CEO Xu, each own less than 1% of the total ordinary shares.
A former employee who is still close to the company echoes the belief that Liu still has a tight grip on JD and claims there have been internal discussions about Liu considering a return to management.
Also Read: COP27: US requests for China to pay for jeopardising climate cooperation
But outside the organization, Xu has taken over as the new spokesperson of JD, replacing Liu. The CEO spoke at the World Internet Conference last week to promote JD's status as a "real economy enterprise" and the company's robust supply chain, which it claims ships to 94% of Chinese counties within 48 hours of an order being placed. Can deliver packages. The conference is China's annual showcase of its model of internet governance.
