DJI Ex-Staffers Are Jailed as Chinese Drone Maker Cracks Down on Fraud
Zhang Yushuo
DATE:  May 25 2020
/ SOURCE:  Yicai
DJI Ex-Staffers Are Jailed as Chinese Drone Maker Cracks Down on Fraud DJI Ex-Staffers Are Jailed as Chinese Drone Maker Cracks Down on Fraud

(Yicai Global) May 25 -- Two former purchasing officers at SZ DJI Technology have been sentenced to prison for graft as the world’s biggest civilian drone maker declares war on corruption.

The two men were each sentenced to five years and 18 months in prison for accepting CNY3.63 million (USD508,620) in kickbacks from a supplier in a case involving CNY75 million (USD10.5 million), a court document showed.

Lv Long and Yi Dan colluded in 2016 to help a firm called Weixinrui become a DJI supplier and to increase the amount of its sales in exchange for backhanders, according to information released on the website of China Judgements Online on May 19.

By August 2018, Weixinrui had supplied Shenzhen-based DJI with CNY75 million worth of products, the report said, citing DJI. The firm then transferred CNY3.63 million to Yi, who gave Lv CNY1.4 million. Money was also distributed among quality management employees, research and development staff and those who placed the orders.

This is the latest outcome of an anti-corruption campaign launched by DJI in January last year, after it discovered extensive evidence of staff corruption that could cost the company as much as CNY1 billion (USD140.1 million).

“Corruption in the firm is much more serious than expected, and it is just the tip of the iceberg,” the company said at the time. It accused 45 members of staff of fraud, 26 of whom came from the procurement department. Sixteen people were handed over to the police and the rest were dismissed.

DJI’s average purchase prices are over 20 percent more than they were in 2018 due to corruption in the supply chain, it said. Many poor-quality items were sold to the firm for double or triple the market price, it added. The firm estimates that high-quality items were bought at a between 20 percent and 50 percent markup.

Editor: Kim Taylor

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Keywords:   DJI,Procurement,Legal,Corruption