Caixin
Feb 03, 2021 05:56 AM
BUSINESS & TECH

Tencent Fires 100 on Graft Allegations Following Internal Probes

Tencent passed cases involving more than 40 people on to police for criminal investigation
Tencent passed cases involving more than 40 people on to police for criminal investigation

China’s internet giant Tencent Holdings Ltd. fired more than 100 employees who allegedly were involved in some 60 corruption cases uncovered by internal anti-graft probes since the fourth quarter of 2019, the company reported Tuesday.

Tencent passed cases involving more than 40 people on to police for criminal investigation while blacklisting 37 companies for permanent termination of business partnerships, the company said.

The findings were disclosed in Tencent’s latest internal anti-corruption investigation report. The company first made public the results of internal graft probes in December 2019, saying more than 60 people were removed for various violations during the first three quarters that year.

In the latest report, Tencent said 22 cases of embezzlement and bribery were uncovered since the fourth quarter 2019. Most of the cases were linked to Tencent’s Platform and Content Group, which runs video-sharing businesses, while violations were also found in the online games and cloud business departments, Tencent said. Four former employees have been investigated by authorities on criminal charges of taking bribes.

Tencent is among several Chinese internet giants that have stepped up internal corruption crackdowns in recent years. The company established an anti-graft probe office and outlined six major violations for which employees could face severe punishment, including fraud, bribery, leaking trade secrets and conflicts of interest.

Other industry leaders including Baidu Inc., Alibaba Holding Group, JD.com Inc. and Xiaomi Corp. set up similar task forces for internal scrutiny. In 2017, 14 major internet companies formed an alliance to cooperate and share information to fight against business violations.

Compared with traditional industries, fast-growing internet companies often care less about cost control and transparency in procurement, creating room for corruption, said Zou Jiaming, a lawyer at Beijing-based Trusmatic Law Firm. Without well-established supervisory mechanisms, graft and violations are rising quickly in the industry, dampening business performance, Zou said.

Industry leaders have toughened crackdowns on graft. In early 2019, DJI Technology Co. Ltd., the world’s largest manufacturer of consumer drones, revealed a series of internal corruption cases that cost it 1 billion yuan ($150 million) in 2018. Most were linked to DJI’s supply chain management and procurement department. A total of 45 employees were caught, 29 of whom were fired, and 16 others were handed over to local law enforcement departments.

Search engine giant Baidu and ride hailing giant Didi also announced punishment of employees on alleged graft and other violations.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).

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