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Wednesday, February 23, 2011. 1 commentFraud Forces Top Execs Out At Alibaba.com
Alibaba.com, the fast-growing Chinese e-commerce site that links global buyers with Asian manufacturers, announced yesterday that its CEO and COO had resigned after an internal investigation uncovered fraud at the company. David Wei, the company’s longtime CEO, and Elvis Lee, the COO, were not directly involved in the fraud, but left the company after accepting responsibility for not stopping it.
According to Alibaba.com, the company found that some of its “Gold Suppliers” were in fact phony companies. Alibaba.com’s internal investigation revealed that 100 salespeople for the company conducted the fraud by allowing completely fake entities to register and sell products on the Alibaba site. Even further, these bogus companies were listed by the salespeople as “Gold Suppliers,” indicating that they were among the site’s most trustworthy. Alibaba’s investigation also showed that these companies lured customers into paying for electronics, but after the payments arrived, the goods were never delivered. In its public statement, Jack Ma, chairman of the company and a member of Counselor’s Power 50, said about 2,300 companies that registered as Gold Suppliers over the past two years had committed fraud on the site.
“Our company has determined that the vast majority of these storefronts were set up to intentionally defraud global buyers,” said Ma, in a prepared statement. “The methods of the perpetrators suggest that they have engineered an organized and systemic attack on the integrity of the Alibaba.com platform for illegal gains.”
Alibaba said only about 100 salespeople out of a sales force totaling 5,000 were involved in the fraud. Many of the workers were fired, and the company is continuing its investigation. “We must send a strong message that it is unacceptable to compromise our culture and values,” said Ma.
(This article has been reposted from the Advertising Specialty Institute Newsletter)
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This is post #743, published on February 23, 2011 @ 8:37am and is filed under Uncategorized with no tags. Visited 2 times. 1 comment
That is really something. I hope not many people were duped by those phony companies.