Lifestyle app Meituan’s crime-busting unit sends around 90 to police

Dec 4, 2018

Meituan Dianping, a Chinese mega lifestyle app, has sent 89 people to the police as part of an internal anti-corruption campaign.

Since February, the company’s investigation division, dubbed “Major Crime Unit Six,” a name borrowed from a famous Chinese police and crime TV series, has closely examined the company’s operations.

The alleged suspects include staff members and others who were involved in nearly a dozen crimes against internal business operations. According to an official release, the company also sent 59 individuals from partner companies, who were involved in 18 corruption crimes, to the police.

Meituan declined to comment on the nature of the alleged wrongdoing but said that a senior channel director at its food delivery unit was fired for violating an internal must-obey regulation that prohibits taking bribes from partners.

In an official anti-corruption notice, Meituan said it has a zero-tolerance policy towards corruption for both its staff and partners.

This isn’t the first time the company has conducted such a campaign. In May 2017, Meituan announced that it had reported ten instances of crimes including fraud, accepting bribes from business partners, and faking data at a Meituan unit, to the police.

Some Meituan companies have taken advantage of the company’s subsidy policies, which are aimed at providing financial support to vendors for discount meals and products. Some partners allegedly set up fake stores to cheat the system. The company is widely believed to have spent more than RMB 4 billion ($585 million) on subsidies.

Meituan Dianping went public in September, raising $4.2 billion in the biggest internet-orientated IPO in four years. In its first earnings release since its IPO, it reported an operating loss that tripled to RMB 3.45 billion in the third quarter. The company competes with Alibaba-backed Ele.me and has entered the ride-hailing market, both of which require substantial capital injection and highly effective internal operation.