The Alibaba Group said in its annual filing with the Securities and Exchange Commission Wednesday that it’s providing the SEC with documents as part of the agency’s investigation into whether the Chinese e-commerce giant's accounting practices have run afoul of U.S. securities laws.
The New York Times reports the SEC inquiry focuses on how Alibaba reports sales data related to Singles Day, China's November e-commerce holiday, as well as logistics affiliate Cainiao Smart Logistics Network, in which Alibaba owns a 47% stake.
Alibaba said in the filing that it’s cooperating voluntarily with the SEC investigation, which is no indication that laws were broken.
Alibaba had faltered after investors grew skittish about its prospects in the wake of its record-breaking IPO in 2014, but shares have recovered somewhat after the company beat estimates in its latest quarter, despite signs of a slowing economy in China.
Earlier this year the Wall Street Journal reported that Alibaba is seeking loans totaling as much as $4 billion to finance its expansion ambitions, including acquisitions. Alibaba has already spent billions on investments in the past year, boosting its mobile and logistics efforts in China and investing in Indian e-commerce company Snapdeal and payments company Paytm.
However, some analysts question Alibaba’s reporting. Herb Greenberg at Pacific Square Research, for example, in the past has said that there’s a serious lack of transparency at Alibaba around its investments and sales, and that it may be reporting some investments as expenses, leading to inflated profits.
Kynikos Associates founder Jim Chanos, for one, is still betting against Alibaba, saying earlier this month that he’s doubtful about its cash flow and questions the company’s own metrics, according to CNBC. "We just don't see how profitable or unprofitable that business is," Chanos said.
Earlier this month, the International AntiCounterfeiting Coalition (IACC) abruptly suspended Alibaba's membership following outcry over its inclusion in the group's ranks: Gucci America, Michael Kors and Tiffany & Co. all left the IACC after Alibaba joined, citing rampant counterfeiting across Alibaba marketplaces. During a speech at the IACC's spring conference in Orlando, Alibaba President Michael Evans assured the organization that Alibaba is leveraging its scale and data prowess to find and eliminate fakes from its marketplaces.