Baidu, Alibaba, and Tencent’s war on corruption

Tech firms are up in arms to combat internal corruption.

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China’s big tech firms have a pressing corruption problem, one that the country’s powerful anti-corruption watchdog, CCDI, is now taking an interest in.

CCDI published a video yesterday that listed some of the high-profile internal corruption investigations currently conducted by China’s tech giants. Baidu, Xiaomi, Alibaba, JD, Meituan and 360 are all been mentioned in the CCDI video.

“Corruption would only destroy the future of the company’s development,” the video warmed, adding that tech firms need to work harder to cure the cause of corruption.

The China E-commerce Research Center documented 57 corruption cases at Baidu, nine at Tencent, eight at JD and six at Alibaba between 2010 and May 2017.

One of the high-profile corruption cases at Baidu involved Li Mingyuan, Baidu’s youngest vice president, resigning in November 2016 over internal corruption cases after he was found having financial dealings with some companies Baidu was acquiring and failing report conflict of interests. Baidu did not report him to the police at the time.

In another case, Zeng Liang, a Baidu vice president who was in charge of the company’s group-buy business, was fired in 2017 for allegedly taking bribery from suppliers when he was a sales executive.

This year alone Baidu fired 14 employees over 12 different internal corruption cases. Most cases involved staff trying to cheat the company’s overtime compensation and reimbursement policies.

At Alibaba, Yang Weidong, chief of the firm’s digital media and entertainment business, was taken in by the police last December for an investigation regarding an “economic problem”–a metaphor usually referring to cases involving corruption.

Kong Qi, a vice president of Alibaba Pictures and the general manager of its ticketing app Taopiaopiao, was arrested in November 2016 for taking bribes worth RMB 1.9 million (USD 269,000).

Also, two former Ant Financial employees were found guilty by a Hangzhou court of taking bribes. Liu Qingnan, one of the two convicted former Ant Financial employees, was sentenced to jail for nine years for taking bribes worth RMB 13 million (USD 1.84 million).

Tencent meanwhile reported 4 of its former employees to the police in 2015. They were involved in corruption and one of the four employees, a mid-level manager, was sentenced to jail for nine years for taking bribes and kick-backs worth multiple millions in RMB.

Also in 2015, two Tencent executives were charged with the crime of official embezzlement for taking as much as RMB 41.6 million (USD 5.89 million) in tax rebates.

To combat internal corruption, Alibaba set up an integrity and compliance department and hired a chief risk officer in 2012. Baidu has established a committee on professional ethics in 2011. Tencent, on its part, published a code of conduct for its employees, which specifically list taking bribes or kick-backs as one of the six red lines not to cross.

CCDI, despite its interest in using tech company corruption cases to promote its anti-graft message, does not have jurisdiction over these tech giants, which are predominantly private business.