Why Alibaba Stock Is Down Today

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© Reuters. Why Alibaba (BABA) Stock is Down Today

Shares of Alibaba (NYSE:) are down nearly 3% in pre-market Thursday after Bloomberg reported that regulators are probing the relationship between Alibaba-backed Ant Group and state-owned Chinese companies.

The Central Commission for Discipline Inspection (CCDI), the country’s anti-graft watchdog, was involved in the investigation that sought to understand the links between Jack Ma’s fintech giant and state-backed banks and companies.

The agency was one of the regulators that sent queries to state enterprises in February as a part of Beijing’s investigation of the former head of the Hangzhou party, Zhou Jiangyong.

Earlier this week, China’s prosecutors charged Jiangyong, accusing him of receiving substantial bribes.

While state-owned banks and companies involved in the investigation have sent their reports on their relationship with Ant, there has not been any action from the regulators yet, according to the report by Bloomberg.

A few months ago, state media released a documentary that showed Jiangyong leveraging his relationship with Chinese tech companies to support his younger brother’s business. One of the companies received an investment from a firm managed by Ant Group.

CCDI’s investigation of Ant comes as a part of Xi Jinping’s unrivaled battle against graft within the Communist Party. Beijing has recently encouraged the CCDI to investigate officials in the financial industry, a probe that has resulted in ensnaring numerous executives in the sector.

Hong-Kong listed Alibaba Group Holding Ltd (HK:) shares closed 3.05% lower today.

By Senad Karaahmetovic