Former Alibaba Exec Sentenced to 7 Years for Corruption

It was almost exactly a year ago that former Alibaba GM Yan Limin was arrested by police on suspicion of accepting bribes. This morning, a Hangzhou court has ruled that Yan, who was once the manager of Alibaba’s Juhuasuan group-buying venture, is to serve seven years in prison as the result of two large bribes he accepted during his time at Alibaba. Several other former Alibaba employees from Juhuasuan and Taobao were implicated in the case were also found guilty of bribery and sentenced, according to Sina Tech.

Around four months before his arrest, Yan was fired from Alibaba for gross incompetence, and when police detained Yan the company made an active effort to inform consumers of what had happened. At the risk of editorializing, my guess is that Yan’s case probably reflects a larger problem with China’s business culture rather than a specific problem related to the culture at Alibaba. An Alibaba spokesperson told Tech in Asia: “As we have stated in the past, behavior of this sort will not be tolerated; the court’s verdict speaks for itself.”

Corruption is an issue that’s likely to be increasingly important for e-commerce companies as Chinese e-commerce continues to grow. China’s government and business culture in other sectors is rife with bribery and it’s highly unlikely that any major company will be able to keep all its employees in line on this front. That Alibaba fired Yan months before his arrest indicates the company has some measures in place to root out and deal with employee malfeasance, but at the same time, the court did find Yan guilty of accepting two bribes — expensive cars — during his tenure at the head of Juhuasuan.

We’ve put out some feelers to a few friends in the industry about this to see what, if anything, most companies are doing to deal with corruption and will update this post or write a follow-up depending on what we hear back.

(via Sina Tech)

Updated 8/8 with a statement from Alibaba.