On Thursday, Chinese tech giant Tencent reported the results of a major 2014 internal corruption investigation which found that numerous employees in its film-related operations were implicated in corruption and bribery. Tencent has already passed reports and documents along to the police and is still waiting to see how all of the cases play out.
But Sina Tech is reporting that according to a “knowledgeable source,” one of those implicated in the scandal is actually Alibaba VP Patrick Liu. Liu, who was arrested in Shenzhen in late June following Tencent’s submission of documents to the police, is the head of Alibaba’s digital entertainment group, but prior to joining the company in 2014 he worked at Tencent for about ten years. His arrest is related to bribery during his time working on Tencent’s video rights procurement, not to anything he may have done at Alibaba.
We have contacted Alibaba for comment on this story and will update this post if we hear back. Update: Alibaba has given Tech in Asia the following statement confirming Liu’s apparent arrest and the details we reported above: “We understand that Patrick Liu with our digital entertainment unit has been detained by the authorities. This issue is related to his time at Tencent and has nothing to do with Alibaba.”
In addition to the video-rights-related corruption, Tencent’s statement on Thursday also made mention of other instances of internal corruption. Below is a translated segment from Tencent’s official statement that contains additional details about the corruption that it reportedly uncovered:
“Last year during a normal internal auditing process, the company discovered that two years prior there suspicious signs in the video content procurement process, and immediately reported them. After police investigated, they suspected corruption: the involved employees colluded with video content providers to raise the prices of their content […] from 2014 through to the present, five or six former employees have already been arrested, but the case is still being investigated.”
“In April of this year, Tencent internally reported four instances of violations of its ‘high-tension line’ [the term Tencent uses for its internal anti-corruption rules], and two of those involved bribes to non-government officials. Those cases have been sent to the police. Tencent’s anti-fraud team received reports and investigations confirmed that one employee at the company had taken bribes from a Xi’an agent totaling RMB 100,000 [US$16,000]. This employee was immediately fired and has already been arrested by police, as have the agent who offered the bribe and other external suspects.”
UPDATE: This story was updated minutes after its original publication to include the translation above.
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