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Share Price: 1,766.50
Bid: 1,766.00
Ask: 1,766.50
Change: 36.50 (2.11%)
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UPDATE 3-Former Tencent employees, including Alibaba exec, held in China graft probe

Fri, 10th Jul 2015 10:42

(Adds latest statements from companies, details)

By Paul Carsten and Arathy S Nair

BEIJING/BENGALURU, July 10 (Reuters) - Chinese authoritieshave detained about half a dozen former employees of TencentHoldings Ltd for alleged corruption and bribery, aswell as a current Alibaba Group Holding Ltd executive,the two companies said.

Amid a continuing crackdown on corruption by ChinesePresident Xi Jinping, Tencent said in a statement on Friday"five or six" people were detained, including two surnamed Zhangand Yue.

"An internal investigation brought to light bribery andcorruption among some online video employees ... The police havebeen notified and we are waiting for the results," the companysaid in a previous statement.

The alleged wrongdoing occurred when current Alibabaexecutive Patrick Liu was heading the social networking andentertainment firm's online video unit, according to Tencent.

An Alibaba spokeswoman said late on Thursday that Liu wastaken into custody by the Public Security Bureau.

Liu could not be reached for comment.

E-commerce giant Alibaba and Tencent, China's biggest socialnetworking and entertainment firm, are the country's two biggestInternet companies. The two have clashed with increasingfrequency as they move away from their core businesses and bothpush into areas like online entertainment, spending hundreds ofmillions of dollars on video streaming platforms and music.

"We understand Patrick Liu with our digital entertainmentunit has been detained by the authorities," Alibaba spokesmanBob Christie said in an email. "This issue is related to histime at Tencent and has nothing to do with Alibaba."

Liu and other former members of Tencent's video businessleft the company in 2013 and joined Alibaba later that year.

Tencent and Liu went to court in 2014 over a contractdispute concerning a confidentiality and non-compete agreementwhich Liu unsuccessfully tried to appeal against, according toofficial Chinese court records.

Alibaba said on its official Weibo microblog it was"extremely shocked" by the detention of Liu, who is also anexecutive director at Alibaba Pictures Group Ltd.

Alibaba has arranged for Liu's duties to be handled in hisabsence to protect Alibaba Pictures' shareholders, will providehim with legal support and that young people make mistakes, thecompany said.

"Patrick Liu was a former member of Tencent's management,and is suspected of corruption while in his position - this farexceeds the boundaries of making mistakes and violated thecompany's rules, as well as violating the law," Tencent said inits own Weibo post on Friday.

"Making mistakes can be forgiven, but how can breaking thelaw be tolerated?" (Editing by Stephen Coates and Kenneth Maxwell)

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