Chinese e-commerce giant Pinduoduo saw its shares drop over 2 percent in the US pre-trading market amid online rumors of a brawl involving executives and market regulators, according to Bloomberg and Lianhe Zaobao's reports.
At least two physical altercations broke out last week between PDD employees and Chinese regulatory officials who were conducting an inspection at this company's Shanghai headquarter.
Staff from the State Administration for Market Regulation were at the time investigating reports of fraudulent shipping practices on the PDD.
PDD stated in a statement to Bloomberg that the claim is untrue and inconsistent with the facts.
Online rumors claim that officials from the SAMR suddenly arrived at Pinduoduo's Shanghai headquarters last Wednesday for an inspection. The following day, PDD executives held a meeting where they concluded this inspection was linked to the departure of one of the company's vice presidents to Xiaohongshu, who had previously served as the deputy director of the advertising division at the market regulation administration.
Subsequently, PDD's top management appointed three key executives to the SAMR's office within the company to provoke confrontation, aiming to escalate tensions and halt the inspection process.
On the evening of December 4, the three individuals got into a physical altercation with regulators, prompting both parties to call the police.
Hannah Wang
