DJI steps up anti-graft campaign following $150 million losses

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(Image credit: BigStock/Nik_Sorokin)

Chinese drone-maker DJI said it will strengthen its efforts to fight graft within the company, following an internal investigation that found it had lost $150 million due to corruption.

In a statement (in Chinese) posted on its corporate website on Wednesday, DJI vowed to keep cracking down on corruption, saying it is the most serious problem [DJI] has encountered as it has expanded over the years.

Earlier this month, DJI placed 45 former and current employees under investigation for allegedly accepting perks for purchasing substandard products or paying above-market prices to suppliers. Of those under investigation, the company handed over 16 people to the police and fired 29 others. 

DJI was not immediately available for comment when contacted by TechNode.

Even global tech darling DJI is not immune to culture of corruption

Corruption investigations are commonplace in Chinese enterprises. Recently, e-commerce giant JD.com, lifestyle services platform Meituan, and ride-hailing giant Didi all conducted similar investigations. However, the incident at DJI is particularly significant. The company is held is in high esteem for its internationalization efforts and was one of the first companies to bring drones to the masses.

From purchasing raw materials to producing components, … corruption from all levels raises supply chain costs by between 16% and 33%, creating a huge volume of hidden losses to enterprises,” the company said in the statement.

Some dismissed employees later posted on popular messaging and social media app Wechat that they were victims of internal strife.” DJI rejected the claims as rumors intended to cover up their misconduct. The company also said that it is facing severe challenges in dealing with corruption within its ranks.

Chinese tech firms have been crippled by internal corporate crimes amid a slowing economy and weakening demand, leading to a slew of intensified anti-graft efforts.

Yang Weidong, former president of Alibabas video streaming platform Youku, was replaced following a police investigation for alleged “economic issues” in December, though very few details were provided. This was followed by ride-hailing giant Didi dismissing more than 80 employees earlier this month for “serious” violations of the company’s rules, which involved cases of fraud, bribery, and information security breaches.