A MEDIA firm Alibaba Group Holding Ltd. recently bought said Friday a review of its finances revealed possible accounting irregularities, casting doubts on the Chinese e-commerce giant’s due diligence as it prepares for a U.S. initial public offering (IPO).

    The announcement by Alibaba Pictures Group Ltd. comes less than two months after Alibaba Group completed its US$804 million purchase of a 60 percent stake in the film and TV production company once known as ChinaVision Media Group Ltd.

    The deal was among the US$10 billion or so Alibaba Group and its affiliates have spent since the beginning of last year on acquisitions, which ventured beyond its traditional e-commerce roots to fend off competition from rivals like Tencent Holdings Ltd., Baidu Inc. and JD.com.

    But the speed at which the group has conducted some of its purchases has raised investor concerns. In June, Alibaba bought China’s most successful football club, the Guangzhou Evergrande, for US$192 million in a deal which was hatched over a few drinks.

    “They’re under a lot of competition pressure, which led them to make some of these deals, but I don’t think a lot of them are actually well thought out,” said Tony Chu, a Hong Kong-based portfolio manager at RS Investments.

    “When you see the extent of the deals, there are so many of them recently announced, that raises the question as to how much due diligence the company has made on some of these deals,” he said.

    Alibaba Group, whose platforms handle more goods than eBay Inc. and Amazon.com Inc. combined, is gearing up for a U.S. IPO this year that bankers and investors expect to surpass the US$16 billion raised by Facebook Inc. when it listed in 2012.

    In a statement, Alibaba Group said it supported the review into Alibaba Pictures’ finances.

    “The new management team has a firm commitment to transparency, good corporate governance and investor protection,” it said. (SD-Agencies)