A number of former employees of Chinese social media giant Tencent have been detained by police in connection with bribery allegations.
One of them is Patrick Liu Chunning, now the head of Alibaba Digital Entertainment Group, who it emerged Thursday had been taken in by police for questioning.
In a statement issued by Tencent, the company said that a number of “ex-employees in the online video unit were involved in bribery. The police were notified and we are waiting for results of their investigation… Five or six ex-employees have been arrested by the police since 2014, and the case is under further investigation currently.” It added: “Four cases related to violations of code of conduct were notified internally and sent to the police in April 2015 and two of them were related to bribes.”
Tencent, which operates the QQ messaging service and the WeChat specified that the former staff had worked in the Tencent Video online streaming business. It is understood that they may have been involved in deals in 2012 where they helped content supplier companies to inflate the price of rights sold to Tencent Video and personally profited from the excess.
Tencent Video is one of China’s most successful online video platforms and has content arrangements that include HBO, National Geographic and the NBA.
On Thursday, Alibaba confirmed that Liu had been detained by police, but it did not specify on what charges. Alibaba told Variety that: “This issue is related to his time at Tencent and has nothing to do with Alibaba.”
Liu spent nearly a decade at Tencent and was previously head of Tencent Video. He and other executives left the company two years ago. Liu joined Alibaba in August 2013. He is also an executive director of Alibaba Pictures Group, the separately listed film investment and production company.
On Friday (July 10) Alibaba Pictures said that “Liu… has been detained by the Public Security Bureau in Mainland China in connection with an investigation into alleged receipt of bribes during his employment with Tencent Technology Co., Ltd which is unrelated to his employment with Alibaba Group Holding Limited or [Alibaba Pictures].”
In comments on its social media account Alibaba said it was shocked by the happenings and that it would co-operate with the police probe.
The Chinese central government has mounted a two year anti-corruption campaign. It has rooted out bribery and graft at the highest level of government and is looking at possible crime in a number of state owned enterprises. A number of executives and former executives of China Central Television (CCTV) are among those detained.
The arrests come at bad times for both Tencent and Alibaba, and both have been accused of louche business practices, Tencent for carrying non-compliant video content, and Alibaba for being a platform for trading in fake consumer goods.
The news did little to dent their share prices however. On Friday Tencent shares were up 2.05% at HK$149 in Hong Kong trading. Alibaba Pictures Group shares traded up 5.13% at HK$2.46.