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The chief executive of e-commerce group Alibaba.com has resigned after an internal investigation showed sales staff "intentionally or negligently" allowed more than 2,300 fraudsters to set up verified stores.
David Wei and chief operating officer Elvis Lee departed amid what the firm – one of China's biggest internet success stories – described as "systemic breakdown in our company's culture of integrity".
Its statement to the Hong Kong Stock Exchange stressed that Wei and Lee were not implicated in wrongdoing. But it revealed it took senior management at the online marketplace at least nine months to take action following a noticeable increase in fraud claims against verified vendors by foreign buyers from late 2009.
It requires a high degree of naivety to expect to have smooth dealings with a company naming itself "Alibaba".
So 2300 out of 140,000 vendors were engaging in fraud. That is around 1.6% of all vendors on Alibaba were bad and total fraud is for $1.7 million only. That the CEO of company has resigned is a good example of difference in business culture and ethics in the USA and in China. In 2008 when a bunch of big American banks went bankrupt, not even a single bank CEO resigned on his own. Many were sacked by their boards because they were just not willing to accept responsibility for their decisions that led to losses worth several hundred billion dollars for their banks, customers, employees, investors as well as governments around the world.
Here the CEO of a major Chinese internet company is accepting responsibility. To me it doesn't looks like a bad thing.
I hear Alibaba did quite well for themselves with ATVs and ATV parts.
The banks you're talking about weren't engaging in fraud. It's not the same thing at all, even if you really dislike what the US banks were doing.
Whatever. Comparing the bank fiasco to deliberate fraud centered around alibaba is a bit simplistic
"Alibaba and the Forty..."
Following the Melamine-in-baby-milk-powder scam last year, the Chinese government "clamped down" on food standards. One or two CEOs were executed, and the wise avoided all Chinese processed foods for life.
This week we discover the Chinese milk-powder industry has found the addition of "hydrolysed leather" (think, caustic soda digested cow-hides) to milk powder is a fine replacement for Melamine.
A few bad apples?