File photo shows the Alibaba employees entering the company in Hangzhou, Zhejiang Province. Photo:Xinhua

It was determined that the conduct of the suspect from China's e-commerce giant Alibaba, who was put under criminal compulsory measures for an alleged indecent assault against a female coworker, does not constitute a crime and his arrest order was not approved, the local prosecutor in Jinan, East China's Shandong, announced on Monday.

Alibaba said in a statement on Tuesday that the company has seen the official announcement concerning the sexual harassment case. Alibaba said the truth has been made clear by law and the whole incident had deeply impacted every employee in the company. 

The company said it believes in the power of justice and kindness, and vowed to take note of the incident, and step up efforts to better build and improve the company. 

Jinan police also said in a statement on Monday that the investigation of the suspect has been terminated but will remain under detention for 15 days as punishment.

The suspect, surnamed Wang, went on a business trip to Jinan with his female coworker surnamed Zhou. During the trip Wang sexually molested Zhou after going into her hotel room on the night from July 27 to 28, according to a statement by the Jinan police on August 14. 

The announcement said that Wang had gone into Zhou's room with her consent, after he was told to check on her by another colleague who claimed that Zhou was "babbling." 

Zhou reported Wang to the police on July 28, accusing him of forcing her to get drunk the night before during a dinner banquet and then sexually harassed her while intoxicated. 

However, the police investigation showed that Zhou drank about 350 milliliters of alcohol the previous night but no one forced her to drink excessively. 

On August 4, Zhou called the police again for another sexual assault claim involving Zhang, a local supermarket worker who was also present at the dinner on July 27.

Zhang accompanied Zhou outside the restaurant after she vomited from drinking too much, then molested her on their way back to the dining room. The next morning, Zhang molested her again before leaving Zhou's hotel room, police said. 

Both Wang and Zhang were fired by their companies after the incident turned into a scandal that has drawn and ignited heated debates. 

The two had been held under criminal compulsory measures under suspicion of sexual molestation with no proof of rape, the police announced. Zhang's actions were later considered to constitute the crime of forced indecent assault and has been arrested by the police. 

Following the case which has seriously damaged the public image of the company, Alibaba Group announced that it is drafting a code of conduct to prevent sexual harassment within the company and has set up a committee to examine misconduct in the workplace.