Alibaba.com CEO and COO resign after fraud investigation

The company said claims of fraud by its suppliers increased from 2009 to 2010

The head of Alibaba.com, a top e-commerce operator in China, has resigned following an internal investigation that found an increase in fraudulent transactions at the company.

CEO David Wei has resigned from Alibaba.com, a business-to-business trading platform part of Chinese e-commerce giant Alibaba Group. Wei's replacement will be Jonathan Lu, the CEO of Alibaba's Taobao.com, China's largest online retailer. Alibaba.com chief operating officer Elvis Lee has also resigned.

The investigation found that Wei and Lee were not involved in any of the fraudulent activities.

By resigning, Wei and Lee wished to take responsibility for fraudulent activity conducted by users on the site.

On Monday, Alibaba released a statement saying that senior management at the company had noticed an increase of fraud claims from buyers against its China Gold Supplier customers.

The fraud had begun in late 2009 and continued throughout last year. The number of suppliers engaging in the fraud included 1,219 who had signed up in 2009 and 1,107 who had signed up in 2010. The company has taken action by terminating the virtual storefronts of the suppliers.

"In general, the sites offered high-demand consumer electronics at very attractive prices, a low minimum order quantity and less reliable payment transfer methods." Alibaba said in a statement. "The average value per claim by buyers against fraudulent suppliers was less than US$1,200."

About 100 sales people, a number of supervisors and sales managers, had allowed the fraud to evade the company's verification measures either intentionally or out of negligence, Alibaba added. The fraudulent activities had no "material financial impact" on the company.

Under Wei's leadership, Alibaba.com had been working to expand its services globally. Last year the company had made acquisitions of two e-commerce companies in the U.S. The goal was to use them to help pave the way for U.S. small businesses to source their products via Alibaba's e-commerce resources.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuespersonnelAlibaba.com

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?