Action against Alibaba calls for observance of market rules

DAYS AFTER A DISPUTE BROKE OUT between the State Administration for Industry and Commerce and Alibaba Group, the corporation that runs taobao.com, China's equivalent of eBay, on whether the latter should be responsible for fake goods sold on its platform, an Alibaba shareholder launched a class action against Alibaba in New York. According to reports, the company listed in New York Stock Exchange was sued for misstatement of its business and risks, which led to investors' losses. Comments:

When Alibaba decided to join the US stock market last September, there were warnings that it lacked knowledge of US stock market rules. Any move of a listed enterprise will be under the magnifying glass of investors and supervisors, and it might face a lawsuit for any misconduct. Most Chinese entrepreneurs fail to realize this fundamental difference between China and the United States and they could pay a huge price for that.

Zhu Lei, an associate professor at the Shanghai Advanced Institute of Finance, Shanghai Jiaotong University, Feb 6