JD.com's Liu Won't Be Charged After Rape Investigation

(Bloomberg) -- JD.com Inc. Chief Executive Officer Richard Liu won’t be charged in connection with a rape investigation in Minneapolis, ending a probe of more than three months, authorities said.

Hennepin County Attorney Mike Freeman announced the decision Friday. Liu had been arrested Aug. 31 and accused of allegedly raping a 21-year-old female Chinese undergraduate student. Liu, 45, was a participant in a University of Minnesota program for business executives from China at the time of his arrest.

JD.com's Liu Won't Be Charged After Rape Investigation

“As we reviewed surveillance video, text messages, police body camera video and witness statements, it became clear that we could not meet our burden of proof and, therefore, we could not bring charges,” Freeman said in a statement. “Because we do not want to re-victimize the young woman, we will not be going into detail.”

Wil Florin, the woman’s attorney, blasted Freeman and his prosecutors for the decision, saying they never met the woman nor reached out to her or her lawyers during the investigation.

“If anyone cares to know why victims of sexual assault are hesitant and fearful to come forward to authorities seeking justice for what has been done to them, look no further than the manner in which this was handled by the Hennepin County Attorney’s Office,” Florin said in a statement. “On her behalf, we will not permit her dignity to be simply swept under the rug.”

Liu has been in China since being released shortly after the arrest. In a blog post, Liu said the announcement by Freeman’s office “proves I broke no law.”

“My interactions with this woman, however, have hurt my family greatly, especially my wife,” Liu said. “I feel deep regret and remorse and I hope she can accept my sincere apology. I will continue to try in every possible way to repair the impact on my family and to fulfill my responsibility as a husband.”

The potential criminal charges have hung over JD.com’s stock for the past three months. Liu’s outsize control of voting rights closely linked the firm’s fate to his own. In China, he is seen as a visionary founder and the driving force behind one of the country’s most successful internet companies.

“We are pleased to see this decision,” JD.com said in a statement on its website. The company’s American depositary receipts gained 5.9 percent to $21.08 on the news -- still significantly below the closing price of $29.43 on the day before Liu’s arrest became public.

In documents and text messages, the female student said she was invited to a party with Liu and other participants of the executive program where wine flowed freely. Her attorney alleged the student had been coerced into drinking more heavily than she wanted. The woman and Liu ended up at her home, where he raped her, the woman alleged. After a call the next morning from a friend of the student, police found the woman and Liu at the student’s apartment. Later that day he was arrested.

Liu’s lawyer, Jill Brisbois, said the decision by the county attorney “confirms our strong belief from the very beginning that my client is innocent.”

Liu and Brisbois hadn’t previously elaborated on what Liu says happened at the dinner in August. On Friday, Brisbois said in an email that all the interactions between Liu and the woman were consensual. Though the woman and Liu both drank wine that night, Brisbois said, Liu wasn’t drunk, and the woman didn’t appear drunk either.

After Liu’s arrest, the woman “made repeated demands for money, and threatened to make her allegations public and to sue Richard if her demands were not met,” Brisbois said.

Freeman’s decision in the criminal investigation doesn’t prevent the woman from filing a civil suit against Liu, where the standard of evidence needed is lower for a judgment. Florin, in a text message, suggested the woman may pursue a civil suit, saying “a civil jury will determine whether Mr. Liu, JD.com and their representatives should be held accountable.”

Freeman, in his statement, confirmed the account of the dinner and the subsequent contact of Liu and the woman by police. He said “there were profound evidentiary problems which would have made it highly unlikely that any criminal charge could be proven beyond a reasonable doubt.”

The three-month period it took to make a decision had “nothing to do with Liu’s status as a wealthy, foreign businessman,” Freeman said.

Formal criminal charges would have made running the company an increasingly untenable task for Liu. Unlike arch-rival Alibaba Group Holding Ltd., which runs a marketplace for third-party merchants, JD earns about 90 percent of its revenue through direct online sales and the CEO regularly travels the world striking agreements with suppliers.

Liu, who has become a household name in his native China and held a keynote panel at the World Economic Forum in Davos this year, was in Minnesota to complete the American residency of a U.S.-China business administration doctorate program at the University of Minneapolis and its Carlson School of Management. Co-led by Tsinghua University, the course takes place primarily in Beijing and is aimed at senior executives; the average age of students is 50.

Since the allegations arose Liu has largely avoided speaking in public, skipping prominent events including the Chinese government-backed World Artificial Intelligence Conference in Shanghai where he was set to be a speaker. Like many founder-led companies, JD’s fate is closely linked to the executive who must be present for its board to have a quorum. He controls almost 80 percent of its voting rights even though he owns less than 15 percent of the business.

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