By Gina Lee

Investing.com –

Alibaba (NYSE) Group Holding Ltd. shares plunged up to 9% Tuesday. On Tuesday, Chinese authorities took legal action against an individual named Ma. They were eventually able to recoup their losses once it was clarified that Jack Ma wasn’t the founder of this company.

The company’s Hong Kong shares rose 0.69% to HK$102.80 ($13.10) by 1:33 AM ET (5:33 AM GMT), after falling as low as HK$92.5.

CCTV reported first that Hangzhou authorities, home to Alibaba, took action against a person named Ma, on suspicion that they had used the internet for activities that could endanger national security.

The report was amended to clarify the identity of Jack Ma.

Steven Leung, UOB Kay Hian’s sales director, stated to Reuters that “talk about a man with the surname Ma living in Hangzhou assisted out an investigation triggering panic. But as clarification came up…it helped calm down market.”

Alibaba shares and the other Chinese internet companies came under severe pressure over the past few years due to regulatory restrictions on the sector in violation of data privacy and antimonopoly regulations.

Following a speech Ma made in October 2020 where he accused financial watchdogs for stifling creativity, Jack Ma was the target of government action.

Ant Group, a fintech company that offers financial services to the public for $37billion was suspended by regulators two days before it planned to list on November 5, 2020. They demanded that Ant be restructured, and opened antitrust investigations into Ma’s businesses. This eventually resulted in a $2.75 Billion fine for Alibaba in April 2021. Ma kept his profile low since the raid on his empire.