The founder of one of China’s richest e-commerce businesses will donate $2.3 billion in shares of his flagship JD.com company to ‘charity’.
JD.com “has been notified by Mr. Richard Qiangdong Liu, the chairman of the board of directors and chief executive officer of the company, that he will donate 62,376,643 Class B ordinary shares of the company to a third-party foundation for charitable purposes,” said the filing on Wednesday, without specifying the third-party foundation that would receive the donation.
Liu’s move adds to a list of similar philanthropic pledges from the country’s top tech billionaires. It comes as China’s tech sector, including JD.com and rival Alibaba Group, is under intense scrutiny as part of Communist Party leader Xi Jinping’s “common prosperity“ drive to reduce income inequality in the world’s second-largest economy.
JD.com’s shares trade at the Hong Kong Stock Exchange and Nasdaq. Its American depositary shares, each of which represents two ordinary shares of the company, closed at $71.85 on Thursday. They were last trading down nearly 1.9 percent for the second day in a row.
American depositary shares (ADS) are the U.S. dollar-denominated equity shares of foreign-based companies for purchase on American stock exchanges.
Liu, 47, owns a fortune worth $15.6 billion on the Forbes Real-Time Billionaire List on Thursday. He established JD.com in 1998, one of China’s most powerful internet businesses. U.S.-listed rivals include Alibaba Group and Pinduoduo. Walmart owns 9.3 percent of Beijing-headquartered JD.com.
Among other billionaire donors in the tech sector last year, Xiaomi CEO Lei Jun donated $2.2 billion in shares to support social causes; and Wang Xing, chairman of China’s food delivery platform Meituan, donated $2.2 billion in shares to his own charity.
Other prominent Chinese tech figures who have increased charitable donations in the face of the regime’s crackdown include Zhang Yiming, the founder of TikTok’s parent company ByteDance, who committed 500 million yuan ($78.6 million) to the Chinese city of Longyan for education.
Between 2011 and 2020, the country’s GDP slightly more than doubled, while the collective fortunes of the members of China’s 100 Richest list climbed around sixfold during the same period, said Forbes.
Last September, Alibaba pledged 100 billion yuan ($15.5 billion) to support the “common prosperity” drive.
Tech giant Tencent Holdings Ltd., also said it would devote 100 billion yuan in total to societal good last August amid regulatory scrutiny from antitrust regulators.
China big tech’s charitable donations hurt their stocks, Bloomberg reported. Stocks of companies that disclosed details of donations and pledges for various causes were sold off on the next trading day.
“Common prosperity” is not a new propaganda phrase in China, but a rapid escalation in official rhetoric and a crackdown on excesses in industries such as technology, off-campus tutoring, and entertainment that has alarmed investors in the world’s second-largest economy.
Reuters contributed to this article.
