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By | Team Register 21st February 2011 13:25

Top execs fly from Alibaba after supplier frauds

Close sesame on your way out, will you?

Two top execs at e-commerce giant Alibaba have taken the fall for alleged fraud by some of the suppliers on its platforms.

The Hong Kong-listed firm announced today that chief exec David Wei and COO Elvis Lee had resigned to take responsibility for the fraudulent actions of some of its B2B sellers, though they were not themselves involved in the fraud.

However, according to AP, the firm found that 100 of its sales reps intentionally or negligently allowed the creation of fraudulent store fronts which were used to defraud customers. As many as 2,326 suppliers dodged the firm's controls to set up the dodgy store fronts.

Alibaba said it had begun an investigation after a spike in fraud complaints by customers.

While it had not found evidence that Wei, Lee or other senior execs had been involved in fraud, it said the two execs had decided to take responsibility for the situation and had fallen on their swords.

The firm said the average amount of fraud per case was under $1,200, but it was working with the authorities to address the situation.

Wei has been replaced by Jonathan Lu, current chief exec of the group's Taobao.com arm. ®

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