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Alibaba Says Former Head of Group-Buying Site Detained

July 6 (Bloomberg) -- Alibaba Group Holding Ltd., China’s biggest e-commerce company, said a former general manager of its group-buying website was detained by the police on suspicion of accepting bribes.

The official of the Juhuasuan website was removed from his position in March for misconduct, according to a statement posted on Alibaba’s e-commerce website Taobao.com yesterday.

Taobao, China’s biggest online shopping website with 500 million user accounts, set up a department in 2010 to handle complaints about the behavior of employees. In May, Alibaba said police arrested some workers at the Internet shopping site after a “small” number were accused of accepting improper benefits from vendors.

“We are transparently communicating with customers, vendors and third parties, as well as employees, when we find a situation involving misconduct inside the company,” John Spelich, a Hong Kong-based spokesman for Alibaba, said by e-mail yesterday. “We’ve noted a handful of situations over the past 18 months that once detected were acted upon swiftly.”

Alibaba.com Ltd., a separate Alibaba Group unit, said in February 2011 that an internal probe found more than 2,300 vendors used its website to defraud global buyers, prompting then-Chief Executive Officer David Wei to quit. The unit had said it will visit the facilities of all paying suppliers as part of its efforts to strengthen protection of buyers on its website.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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