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 Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuespersonnelAlibaba.com

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

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

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?