By Gina Lee

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Alibaba (NYSE:BABA) Group Holding Ltd. (HK:9988) shares slumped as much as 9% on Tuesday, after state media reports that authorities in China took action against an individual surnamed Ma. However, they recouped those losses after clarification that the individual was not founder Jack Ma.

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 first reported that authorities in Hangzhou, where Alibaba is headquartered, took action against an individual surnamed Ma on suspicion that he/she used the internet to engage in activities endangering national security.

This report was later updated to clarify to make clear that the individual in question was not Jack Ma.

"Talk that a guy with the surname Ma in Hangzhou helped out an investigation triggered the panic, but as clarification came up... it helped calm down the market," UOB Kay Hian sales director Steven Leung told Reuters.

Shares in Alibaba and other Chinese internet companies have come under pressure in the last couple of years thanks to a regulatory crackdown on the sector for violations of antimonopoly, data privacy, and other regulations.

The government started its crackdown on Jack Ma and his assets after Ma gave a speech in October 2020 accusing financial watchdogs of stifling innovation.

Regulators suspended the $37 billion listing of fintech firm Ant Group two days before its planned listing on Nov. 5, 2020. They ordered that Ant be restructured and launched antitrust investigations into Ma's businesses that eventually led to a record $2.75 billion fine for Alibaba in April 2021. Ma has been keeping a low profile since the crackdown on his empire.