Alibaba Group Holding’s initial public offering may be subject to additional scrutiny by the Securities and Exchange Commission after the company said it had discovered questionable accounting activity with its acquired film company, Bloomberg News reports.
Alibaba purchased a 60 percent stake in Hong Kong-based ChinaVision Media Group for $800 million just two months ago, renaming it Alibaba Pictures Group and appointing new management. According to The New York Times, Alibaba said that it discovered “possible noncompliant accounting treatments” related to inadequate provision for impairment on assets or write-downs, which were not identified. The e-commerce giant said it therefore would not be able to meet the mid-year deadline to report its earnings for the first six months of the year, adding that its shares would not be traded until auditors can sort out the “suspicious activity.”
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