A US appeals court has revived a lawsuit accusing Alibaba of defrauding shareholders by concealing a regulatory warning about counterfeiters that it had received shortly before going public.
The online retail giant has long faced accusations that its websites are a haven for counterfeiters.
Last year, a lower court ruled in favour of Alibaba, saying it had flagged the regulatory risks in its listing documents.
But the appeals court now says the regulatory warning is "highly material" to investors and would likely have had a multi-billion dollar negative effect on its US$25 billion listing.
The court ruled that a lower court judge erred in dismissing claims by holders of Alibaba's American Depositary Shares and ADS call options against Alibaba, executive chairman Jack Ma and others.
Alibaba had no immediate comment. The company has long faced accusations that its websites are a haven for counterfeiters, including of luxury goods. (Reuters)