Former Kuaishou executive arrested for alleged corruption amid anti-bribery pressure on China’s Big Tech

27-Feb-2021 Intellasia | South China Morning Post | 5:02 AM Print This Post

Kuaishou Technology, China’s second-biggest short video platform that recently went public in Hong Kong, confirmed on Thursday that its former vice-president Zhao Danyang has been arrested for alleged corruption.

Zhao joined Kuaishou in February 2015 and was mainly responsible for the company’s content business. Li Lei and Xu Juan, Zhao’s subordinates at Kuaishou, were also arrested for suspected misappropriation of company assets, Kuaishou confirmed to the South China Morning Post. The news was first reported by Chinese media outlet Tech Xingqiu on Wednesday.

While the arrest happened in September last year, Chinese police have yet to release any official statement.

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Kuaishou did not elaborate on the details of the case or whether the company has any anti-corruption measures in place.

Kuaishou’s stock price tripled soon after the company’s IPO on February 5, although it has since pulled back from its peak value amid volatility in the Hong Kong stock market. Despite news of the corruption case, Kuaishou shares rose by as much as 4.7 per cent on Thursday.

The Beijing-based company is not the only tech giant in China dealing with suspected corruption. China’s crackdown on bribery, initiated by President Xi Jinping in 2012, has recently widened to the tech sector as the industry becomes more important to the economy. Connections, or guanxi in Chinese, are traditionally an important aspect of business dealings in China. Anti-bribery measures, which challenge the status quo, could severely disrupt the tech sector.

In 2019, some of China’s biggest tech companies were named in an online video posted by China’s anti-corruption agency, featuring several high-profile internal investigations. They included e-commerce firms Alibaba Group Holding and JD.com, internet search giant Baidu, smartphone maker Xiaomi and on-demand delivery giant Meituan.

Alibaba is the parent company of the Post.

The Central Commission for Discipline Inspection said the initiative was meant to be a “deterrent” and tech companies should “work hard to address both the symptoms and the root cause” of corruption.

Earlier this month, social media and video games giant Tencent Holdings said it had fired more than 100 employees for alleged corruption and bribery since the fourth quarter of 2019, with 40 of them handed over to Chinese public security and judicial authorities due to potential violations of the law.

In a post published on its WeChat account, the Shenzhen-based company laid out 22 cases involving misappropriation of company assets, corruption and bribery. In one case, Ding Xiaojiao, former deputy head of the entertainment and information department at Tencent’s online and media division, was accused of taking advantage of the position to accept benefits from suppliers and colluding with them to embezzle company property. Ding was dismissed by the company and investigated by the police. The company also added 37 companies to its “no cooperation ever” list.

Soon after, news emerged that a Tencent executive was detained by Chinese authorities in relation to a corruption investigation against Sun Lijun, a former vice-minister at the powerful Ministry of Public Security, The Wall Street Journal reported.

Around the same time, China’s ride-hailing giant Didi Chuxing said it investigated 64 cheating and corruption cases last year and fired 70 people. A total of 11 people, both inside and outside the company, were reported to the police.

Some companies are taking preventive measures to deter corruption. JD.com has given some of its employees a tour of a detention centre in Beijing in a bid to raise awareness, according to multiple Chinese media outlets.

https://sg.news.yahoo.com/former-kuaishou-executive-arrested-alleged-085018060.html

 

Category: China

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