China’s leading drone maker DJI confirmed that the company suffered a loss of more than RMB 1 billion (US$150 million) in 2018 due to corruption cases that occurred when it introduced external suppliers.
A total of 45 employees have been found to be involved in corruption, including 26 employees in departments such as R&D, procurement and quality control, who were entitled to decide which companies would become DJI’s suppliers.
DJI said internal corruption had pushed up the company’s procurement prices 20 percent above what would have been reasonable.
“This 1 billion yuan, which should have been our net profit and should have been spent in boosting the company’s development and improving employees’ benefits, was wasted,” said a DJI internal statement that was leaked. DJI later confirmed the information to Chinese media.
DJI’s global revenue hit RMB 18 billion (Roughly US$2.6 billion) with overseas revenue accounting for 80 percent.
Actually, DJI is not alone in suffering from internal corruption scandals.
Chinese phone maker Xiaomi announced a corruption case in 2017, in which six employees were found to be involved. However, the tech giant did not disclose the actual loss, although it showcased its zero-tolerance attitude toward corruption.
Editor: Nadine Freischlad