CEO Richard Liu was arrested last week after he was accused of rape. His case caused Chinese online retailer to drop its sales by 11 percent on Wednesday.
Minneapolis police department gave a statement on Tuesday that Liu was arrested on Friday night and he was released without bail the following day. He then returned to China after his release. Reports said the CEO was not charged with any crime.
Within two straight days, the company's shares have dropped by 16 percent with its shares closed at $26.30 on Wednesday. The company's stock was reported to have plummeted this year.
JD.com's rating indicates increasing uncertainty. The website was founded by Liu in 2004 and he has parlayed his ownership over a stake worth billions of dollars. His stake controls the company's almost 80 percent voting rights. The rating on the stock given by Stifel analysts showed a decrease from $48 to $39 on Wednesday.
According to the analysts, they are expecting that the investors will view the recent events as an additional risk to a stock that has already struggled YTC. They stated that the additional negativity could continue to be an overhang on shares for some time.
Reports from the Reuters stated that the CEO's lawyers said that he denied his guilt for the accusations.
Earl Gray, Liu's lawyer in Minnesota stated that the Chinese businessman denies any wrongdoings and that he did not expect his client to be charged.
Joseph Friedberg, the defense attorney said on Tuesday that they are not going to charge the case because there is no credible complaint against the businessman.
According to John Elder, Minneapolis Police Department spokesperson, if there were any charges against the businessman they won't be filed until a complete criminal investigation was done and it is impossible to be done before Friday.
The police report is starting present a clearer picture of the nature of the accusation against Liu. The reports stated that the alleged offense was "criminal sexual contact-rape" without the involvement of domestic violence.
Elder stated that Liu's alleged attack reportedly happened at 1 a.m. local time on Friday and Liu was taken into custody that evening.
According to analyst Rob Sanderson of MKM partners, if the news gains media focus, it could attract negative attention that could offset some of the positive associated with the endorsement by Walmart and Google. He also added that negative publicity might compromise the company's ability to attract international brands of its marketplace. It will endanger the top focus of the CEO over the past two years.
