Hong Kong (CNN Business)One of China's top tech billionaires is shifting away from managing his company's core business, a few months after being arrested in the United States on suspicion of rape.
JD.com CEO shifts away from core business after US arrest
Richard Liu, the founder and chief executive of Chinese e-commerce company JD.com, said he will have a new focus going forward, handing responsibility for the company's main business to other executives.
"For me, personally, I will focus more on new businesses," Liu said on an earnings call this week. "For mature businesses, our team can handle that."
The businessman, whose Chinese name is Liu Qiangdong, was arrested in Minneapolis in late August following a rape allegation, police said. He was released without bail less than 24 hours later, and quickly returned to China.
The company said Liu was falsely accused, but news of the arrest followed him home, where images of the billionaire in an orange jumpsuit circulated on Chinese social media.
Shares in JD.com (JD) closed down 8.4% on Monday following news of Liu's changing role and the company's lackluster quarterly earnings report.
JD.com's stock has plunged nearly 60% since a high in January. The e-commerce giant is under pressure from China's slowing economy and the US-China trade war. Liu's arrest has not helped matters.
"Investors are right to be scared," said CNN contributor Ryan Patel, former vice president of global development at Pinkberry.
"People buy things from places they want to be associated with," he said. "The best decision is for (Liu) to not be a distraction and go to the side ... he can always come back."
It's unclear how diminished Liu's role at China's second largest online retailer will be. He still controls the company board and it will be difficult for JD.com to make any substantial decisions without him, said Benjamin Cavender, Shanghai-based analyst with China Market Research Group.
"Even if he's not there as a figurehead and not present in the press, he's still likely going to be fairly involved in the business," Cavender said.
"I can't imagine him being wired to step away, I think this is damage control," he added.
Executives on the earnings call brushed off questions about the allegations and the status of Liu's case.
"We really do not have any new information to share with you," Sidney Huang, JD.com's chief financial officer, told analysts. "And honestly, we cannot further comment, because it is important that we respect the due process of the US justice system," he added.
Liu, 45, is one of China's richest tech tycoons with an estimated net worth of more than $5 billion.