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Alibaba.com's top execs depart following scandal

  • Anita Davis
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Alibaba Group, China's e-commerce behemoth that last month announced a possible tie-up with PE investors, has come under scrutiny for its alleged role in allowing fraudulent vendors to set up storefronts on its B2B domain Alibaba.com, prompting the website’s CEO David Wei and COO Elvis Lee to depart the company.

According to reports, an internal investigation revealed that more than 2,300 vendors on its leading website were frauds, passing knock-off products for the real goods, sometimes assisted by Alibaba's staff. Questions of Alibaba's management has now been called to light, and the top-level departures have led to the largest fall in share prices in a year and a half, to HK$15.08 ($1.94).

Last month, reports surfaced that Alibaba Group sought to invest $4.5 billion to form a network of warehouses across China, possibly through a joint fund set up with a private equity firm. The Group's Founder, Chairman and CEO Jack Ma has also aired his plans to form a $200 million VC fund for investing in Chinese companies.

 

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