Alibaba Says China Police Arrest 36 in Probe of Website Scams
Chinese police arrested 36 people after a probe of fraud on Alibaba.com and other websites that cheated overseas buyers out of more than $6 million, Alibaba Group Holding Ltd. said.
The people are accused of using Alibaba.com and other websites to imitate legitimate vendors and sell products to businesses outside of China, spokesman John Spelich said today, confirming a report in Alizila, an Alibaba-owned news site. Chinese suppliers pay a fee to list merchandise on the site, and Alibaba.com says it has an authentication process to check that suppliers are credible.
The suspects were arrested from April 11 to 15 after an investigation involving Alibaba.com and police from the city of Hangzhou, where Alibaba Group is based, Alizila reported. Alibaba.com has refunded $1.94 million to victims of the scam, the website said.
Alibaba.com said in February that it found more than 2,300 vendors used its website to defraud global buyers, prompting its then chief executive officer and chief operating officer -- who weren’t accused of wrongdoing -- to resign. The number of fraud complaints received by Alibaba in June fell 70 percent from February, Spelich said.
Sunnyvale, California-based Yahoo! Inc., the largest U.S. Web portal, is the biggest shareholder of Alibaba Group. Yahoo shares rose 15 cents to $15.04 at 4 p.m. New York time in Nasdaq Stock Market trading yesterday.
To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net.
To contact the editor responsible for this story: Tom Giles at tgiles@bloomberg.net.
Rate this Page