China’s cyberspace administration has asked its Beijing branch to punish social media platform Weibo (NASDAQ: WB) for allegedly throttling information related to a scandal involving an Alibaba executive, according to a post on the regulator’s official WeChat account on Wednesday. Alibaba is one of the social media platform’s largest stakeholders.
While the regulator’s official post did not explicitly name the Jiang Fan affair as the reason behind the decision, it pointed to an incident involving “a certain Jiang” that led to the company “interfering with orderly online communication”—widely believed to be a veiled reference to the affair.
Jiang Fan, the youngest C-suite member of Alibaba at 35, triggered public scrutiny of Alibaba and Weibo in April, after his wife allegedly warned Zhang Dayi, an online celebrity who is an early-stage investor for Ruhnn (NASDAQ: RUHN), to stay away from her husband. Alibaba invested in Ruhnn in 2016, taking a 8.56% stake, while Zhang holds a 15% stake, according to the company’s initial public offering prospectus filed in May 2019. Soon after the post went viral, netizens noticed the disappearance of related info from Weibo’s trending and hot topics, raising speculation about a cover-up.
Regulators also accused the platform of “disseminating illegal information”, without providing further details, and called on its Beijing branch to fine Weibo and enforce a platform reshuffle, which includes pausing the “trending” and “most-searched” features from June 10 to 17.
Weibo confirmed on Wednesday that the platform has stopped updating these two rankings and will improve its processes regarding information dissemination and content moderation.
After the affair scandal broke in April, Alibaba launched an investigation into Jiang’s involvement in its investment in Ruhnn and cleared him of misconduct. However, they demoted him from partnership at the company, where he was one of 37 partners alongside founder Jack Ma, among other punishments, for creating a PR crisis. Jiang was president of B2C e-commerce platform Tmall and C2C platform Taobao, both Alibaba (NYSE: BABA) companies.