(Hong Kong and New York) – Alibaba Group chairman Jack Ma has put on a brave face in response to a class action lawsuit filed against his company in the United States, saying it is part and parcel of listing overseas and a Chinese firm should be courageous in such situations.

Ma, a co-founder of the e-commerce firm, made the comments at a function sponsored by the Our Hong Kong Foundation, a think tank launched by Tung Chee-hwa, who once led the former British colony.

"You should not be afraid of getting sued if you dare to go get listed and this is the courage a Chinese firm should have," he said.

Ma also tried to defuse criticism of Taobao.com, the Alibaba website that matches mostly small businesses and consumers. He said a lot of the goods on the site that the government deemed fake simply lack official permission to hit the market.

"What is great about Taobao is that you might never have heard of some of the stuff sold there and this is innovation," he said.

The day before Ma spoke, Hong Kong newspapers reported that fake college diplomas were being sold on Taobao for 300 yuan to 1,000 yuan. Ma said his company would look into the diplomas.

He admitted that fighting counterfeiting is very difficult even though Alibaba has 2,000 full-time and 5,000 part-time employees working to keep fakes off its websites. Alibaba has spent 1 billion yuan on the issues from the beginning of 2013 to the end of November last year.

Alibaba problems with fake goods became an issue because China's State Administration for Industry and Commerce (SAIC) published a white paper on January 28 amid an ongoing argument between Alibaba and the country's regulator of commerce.

That white paper detailed a closed-door meeting between SAIC officials and Alibaba executives regarding counterfeit goods and other irregularities at the company. The meeting was held in July, two months before Alibaba's initial public offering in New York raised US$ 25 billion.

The SAIC has backtracked, saying the document was not a legally binding white paper, but only the minutes of a closed-door meeting.

Despite this, the New York law firm Robbins Geller Rudman & Dowd LLP filed a class action complaint in U.S. District Court in New York on January 30.

The complaint alleges that by not disclosing the meeting, Alibaba misled the public regarding the soundness of its business operations and the strength of its financial prospects and hid substantial regulatory scrutiny.

Hao Junbo, of Beijing Hao Junbo Law Firm, said an argument over whether the SAIC document is a white paper or meeting minutes is useless. "The key is whether the problems that were claimed in the document do exist," he said.

The SAIC's elaborating over the legality of the document only showed that problems with counterfeits existed, Hao said.

Huang He, an associate professor at Yeshiva University in New York, said the SAIC document showed Alibaba executives knew more about their problems than investors could learn from its prospectus.

But he said the plaintiffs in the lawsuit must prove Alibaba made false claims to mislead and they suffered losses as a result. Many companies chose to settle such lawsuits out of court, he said.

Alibaba's share price fell 4.36 percent on January 28 and 8.78 percent on January 29, closing at US$ 89.81. The closing price on February 3 was US$ 90.61.

(Rewritten by Li Rongde)