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Alibaba says 'no factual basis' to story that insider is helping SEC investigation

Joseph Tsai
David A. Grogan | CNBC
Joseph Tsai

Alibaba on Wednesday rejected a report that claimed a "high-up" whistleblower in the company is working with U.S. authorities to investigate its accounting practices.

The New York Post reported Tuesday that an insider at the Chinese e-commerce giant is helping the Securities and Exchange Commission to investigate "controversial accounting practices" related to transactions between its Cainiao logistics arm and several other business affiliates.

Alibaba disclosed in May that the SEC was looking into this and also the way it reports its annual "Singles' Day" shopping festival.

The Post said a "high-up official" helped the SEC investigate, citing a source close to the situation. It's unclear whether that person is still at Alibaba. The source said that the investigation could take "another several months," according to the newspaper.

Alibaba IPO
Adam Jeffery | CNBC

Alibaba dismissed the report during an earnings call after it reported results that beat market expectations.

"On this we have been very transparent … about what's going on. We disclosed all the issues involved and the fact we are voluntarily co-operating with the SEC in their inquiry," Joseph Tsai, executive vice chairman at Alibaba, told investors.

"We don't think there is any factual basis to the New York Post story. So on that score, when we have real news, we will update everyone."

Tsai added that company detractors are "trying to subvert people's attention" away from the upcoming Singles' Day, which happens on Nov. 11.

Cainiao is the company's delivery business that was started to solve logistics problems in China. In March, the company reportedly raised a 10 billion yuan funding round. In its latest annual report, Alibaba disclosed Cainiao's revenue, assets and liabilities for the first time.

Alibaba has been trying to be more transparent as it continues to invest in businesses to expand its global footprint.

But some investors like short seller Jim Chanos continue to be skeptical. Chanos told CNBC last month that the problem with Alibaba is that "you don't see the entire operation." The Chinese e-commerce titan, however, issued a statement at the time saying that Chanos "continues to be wrong and uniformed about Alibaba."