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Chinese tech conglomerate Alibaba Group is once again in the news. Investigations led into the group by Indian authorities have revealed that some of the company's Indian subsidiary's documents were 'false & fabricated'.
A probe was launched against Alibaba Cloud (India) LLP, the Indian subsidiary of the Alibaba Group, after a complaint was filed by the Registrar of Companies, Mumbai, alleging criminal conspiracy, trust violation, and fraudulent documentation. The probe is jointly launched by the Ministry of Corporate Affairs and the Mumbai Police.
Also, read about the economic crisis in Sri Lanka.
The investigation revealed that the company's Indian-origin partner resigned shortly after the incorporation of the company in 2017, after which the company was passed on to Chinese nationals.
Moreover, the company has also submitted fabricated documents with the RoC. For example, the company's registered address in Mumbai was non-existent. Furthermore, a CA named Anand Kidambi is alleged to have assisted the company by filing false documents. It is alleged that he incorporated Alibaba Cloud (India) LLP on March 25, 2017, with three partners: Pooja Cherian (98% shares), Tip Pak Tung Janson (1% shares), and Timothy Alexander Steinert (1% shares). Cherian moved out of the company soon thereafter.
"There is a suspicion that the firms are being used as a vehicle for money laundering. The probe is undertaken to find the source and the ultimate beneficiary of the money and if there is any political or economic connection," one of the officials said.
Since late May 2022, the stock has shown signs of recovery after consistently declining. Yesterday, the stock showed a massive gap up opening and opened at $112.54 per share. However, bears took over as they drove the stock back down to $102.24 per share, resulting in a 9.15% intraday decline.
Article by Aman Agarwal.
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