Alibaba's shares down nearly 9% after CEO resigned

Alibaba.com shares fell by as much as 8.9% on Tuesday after the Chinese e-commerce firm replaced its CEO following an increase in fraudulent transactions. 

On Monday, Alibaba.com CEO David Wei Zhe and chief operating officer Lee Shi-huei Elvis resigned after a noticeable increase in fraudulent transactions at the Chinese e-commerce firm's website.                                            

The company said that Lee and Wei were not personally involved in any of the claims and that they had made good faith efforts to address the problem, but were resigning to take responsibility for a "systemic breakdown".   

"We are concerned that the company's overseas customers will be less willing to transact business with the company''s CGS (China Gold Supplier) members as the level of trust in the platform declines," said Paul Wuh, analyst at Samsung Securities.  

Alibaba's so-called China Gold Suppliers is a network of high-volume members. Samsung is maintaining a sell rating for Alibaba's stock with a target price of HK$11.   

Alibaba shares, which have risen by about 20 percent since the start of the year before Tuesday's sharp fall, dropped to as low as HK$15.2, the lowest intraday level since  HK$15.10 on Jan 31.