Chinese authorities hanging a blade over the national technology titans. The arrest of a senior Alibaba executive, the head of its video-streaming unit, suggests Beijing’s anti-graft crackdown will not spare its web titans. Companies’ poor disclosure, though, is adding to the problem, said Reuters.
The head of Alibaba’s video streaming platform has been arrested in China on suspicion of accepting improper payments, the e-commerce company says. Yang Weidong is now under police investigation and has been removed from his position as president of the video site Youku, according to a statement Alibaba filed with the US Securities and Exchange Commission on Tuesday.
A number of private sector tycoons, nicknamed “big crocodiles”, have found themselves ensnared in President Xi Jinping’s anti-corruption drive. Recent high-profile cases include bosses of financial conglomerate Tomorrow Holdings, whisked out of his luxurious Hong Kong residence in a wheelchair, and of oil trader CEFC, as well as Wu Xiaohu, the former chairman of the now state-controlled Anbang Insurance Group. But until Yang’s arrest this week, big names in technology had largely been spared.
The change adds more unpriceable risk to the sector, where increasing state control over the internet has already proved costly. Unpredictable censors are punishing video and news sharing apps, including ones from Bytedance, the $75 billion mega-unicorn, for “vulgar” content. Pony Ma’s gaming empire, Tencent, has shed nearly $100 billion in market value since regulators have stopped approving new video games in April, without any official explanation.
Under China’s president Xi Jinping, tens of thousands of Communist party members have been purged in an anti-corruption campaign. New legislation introduced last year expanded the powers of the party’s top anti-corruption watchdog to oversee inspections of all government departments and state-owned institutions.
The government has also cracked down on the entertainment sector. Earlier this year, Chinese film star Fan Bingbing disappeared from the public eye after being accused of tax evasion.