Invite colleagues
The gossip this afternoon around the water cooler was on news Alibaba.com found over 100 employees suspected of abetting fraud. To try and get a better understanding if this gossip was real or just a beat up... we turned to an Internet search.... it was revealed via this search that Alibaba.com CEO David Wei and COO Elvis Lee resigned after an internal investigation showed sales staff "intentionally or negligently" allowed more than 2,300 fraudsters to set up verified stores.
Jonathan Lu, CEO of Taobao, was named as Wei’s replacement while no replacement was named for the COO position, yet.
Alibaba.com Chairman Jack Ma said that Wei and Lee, while not involved in the fraudulent activities, “did the honorable thing by accepting full responsibility” for what the company described as a “systemic breakdown of Alibaba.com’s culture of integrity.”
Alibaba.com requires potential vendors to provide business registration documents to set up storefronts on the site. But fraudsters attack the loophole by submitting fake papers, sometimes with the help of Alibaba.com sales staff, the investigation found. Once fraudster vendors were established on the site, they take orders, get paid up front but never ever send out the merchandise.
The report in the New York Times said,
A spokesman for Alibaba, John Spelich, said the company was working to compensate victims. He also said the company had created technology to help better detect fraud in the future.
The company insists the fraud involved only about 100 people out of a sales force of about 5,000. Many of the workers were dismissed, but the company said the investigation was continuing.
So sad to see this kind of behavior from a mainstay Chinese Internet company... and looks like a number of destroyed careers. Lets hope other execs in Chinese Internet firms see the downside from these type of short term activities ...
Written on Monday, 21 February 2011 20:05 by Matt McDougall
