Alibaba drops in stock market, fear of Beijing investigation into data leaks

Alibaba drops in stock market, fear of Beijing investigation into data leaks

by Josh Horwitz

SHANGHAI (Reuters) – Alibaba Group shares suffered their biggest drop in a month on the Hong Kong Stock Exchange on Friday after a Wall Street Journal report that officials in the online data storage and management business (” cloud”) of the group were summoned by the local authorities as part of an investigation into a possible misuse of data on an exceptional scale.

An unidentified hacker claimed last week that he had personal information on more than a billion Chinese nationals, files believed to be from Shanghai police.

According to the Wall Street Journal, which quotes cybersecurity researchers, the management of this database had been left freely accessible on the Internet for more than a year without any password protection.

Based on police information, researchers interviewed by the daily said the data was hosted on Alibaba’s “cloud” platform.

The WSJ article adds, citing sources familiar with the matter, that Shanghai authorities have summoned executives from the e-commerce giant’s “cloud” division in connection with the case.

Asked by Reuters, local authorities and spokespersons for Alibaba and its “cloud” division did not immediately respond to requests for comment.

The Chinese authorities have at this stage never confirmed the misappropriation of data.

Alibaba stock ended the day down 5.98%, its biggest single-session percentage decline since June 13. It lost 15.5% of its value for the week as a whole, its worst weekly performance since going on the market in November 2019.

For Brock Silvers, chief investment officer of Kaiyuan Capital in Hong Kong, if a link were established between Alibaba and the hijacking of data, the group would be “at the mercy of regulators in Beijing”.

“The development of its activities could be affected until the case is closed. And even if it is cleared, there is a risk of significant fines”, he added.

(Report Yuvraj Malik in Bangalore and Josh Horwitz in Shanghai, French version Marc Angrand, edited by Sophie Louet)

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