JD.com's CEO was arrested on allegation of rape

Richard Liu attends a Reuters interview in Hong Kong

Richard Liu attends a Reuters interview in Hong Kong

Liu Qiangdong, CEO of the Chinese e-commerce giant, was arrested on Friday night over a sexual-misconduct allegation during a business trip in Minneapolis.

The Chinese billionaire has denied any wrongdoing.

The Minneapolis p‌ol‌ic‌e department, however, has disputed the claim, saying that an investigation is ongoing and Liu was merely allowed to go free without bail or travel restrictions.

Mr Liu, who is also known as Richard Liu, was arrested in the USA on Friday and released on Saturday.

On Tuesday, defense attorney Joseph Friedberg said, "They are not going to charge in this case".

A spokeswoman for the University of Minnesota said Liu, who is enrolled as a student with the Carlson School of Management's doctor of business administration China program, was in Minneapolis to attend a weeklong residency, from August 26 to September 1. It said the alleged offense was "criminal sexual contact - rape", and said domestic violence was not involved.

The reason for Mr Liu's arrest in the USA was initially disclosed as "criminal sexual conduct".

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Minnesota law defines five degrees of criminal sexual misconduct, ranging from a gross misdemeanor to felonies, covering a broad array of conduct ranging from nonconsensual touching to violent assaults with injuries. It is not clear, however, if he has to be physically present or could participate by teleconference.

Watch JD.com trade in real-time here.

Danny Law, Hong Kong-based analyst at brokerage Guotai Junan, said that if USA police charged Liu, the firm's share price would fall further, but predicted there would not be a sharp crash because of an already steep fall so far this year. Shares in JD.com, China's second largest online retailer after Alibaba, dipped Tuesday to an 18-month low, according to Reuters.

The company, backed by Walmart Inc, Alphabet Inc's Google and China's Tencent Holdings, is looking to bolster its global reach even as it faces stiff competition from rival Alibaba Group Holding Ltd at home.

"If this spirals as a media focus, negative attention could offset some of the positives associated with endorsement by Walmart and Google", analyst Rob Sanderson of MKM Partners said.

In June Google announced it would invest more than half a billion dollars in JD.com as part of a move to expand retail services around the world. Liu talked about the fashion industry in a press release about the deal but did not address his arrest in the United States.

Liu's name was also caught up in a sexual misconduct trial in 2015, though he was not the defendant, according to Reuters. Liu was not accused of any wrongdoing in that case, according to a court document.

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