(Reuters) – China’s e-commerce group JD.Com said its unit Dada Nexus had identified “certain suspicious practices” in an internal audit that may cast doubt on the unit’s online advertising, marketing services revenues and operation costs.
Dada said in a separate statement that an estimate of about 500 million yuan ($70 million) of revenues from online advertising and marketing services may have been overstated for the first three quarters of 2023.
The on-demand retail and delivery operator also said an estimated 500 million yuan of operations and support costs may have also been overstated. It gave no further details.
The news sent Dada’s shares down as much as 49.5% to $1.59 on Monday, the lowest and biggest daily percentage decline since its debut in June 2020.
JD.Com’s Hong Kong shares fell as much as 1.2% on Tuesday morning, tracking a 2.7% fall in its U.S. shares on Monday.
Dada will conduct an independent review with the assistance of independent professional advisers, JD.Com said in a filing to the Hong Kong bourse.
($1 = 7.1592 yuan)
(Reporting by Donny Kwok; Editing by Anne Marie Roantree and Sonali Paul)
