Drone maker DJI investigating 1 bln yuan internal corruption cases
Nicholas Moore

DJI, one of China's most successful high-tech brands and the world's biggest seller of commercial drones, has revealed it is investigating an internal corruption problem which could cost the company as much as one billion yuan (150 million U.S. dollars).

A report by the Chinese Securities Journal published Friday featured an internal company report by SZ DJI Technology Co. Ltd., which stated at least 40 people had been investigated over corruption, a number which could increase beyond 100.

DJI later confirmed that a corruption investigation was underway, telling Reuters “a number of corruption cases have been handed over to the authorities, and some employees have been dismissed.”

A DJI drone hovers above New York, U.S., August 2018. /VCG Photo

A DJI drone hovers above New York, U.S., August 2018. /VCG Photo

The company also stated it expected losses in the 2018 financial year of one billion yuan as a result of the corruption. That could have doubled the profit the company made one year earlier.

A statement published by the company clarified that “some employees inflated the cost of parts and materials for certain products for personal financial gain.”

Economic Daily reports that 16 people have been handed over to authorities, while 29 others have been sacked. The corruption cases are centering on price inflation in the supply chain, with workers accused of agreeing to double and even triple prices paid by DJI for parts, receiving kickbacks from contractors in return.

A report by Reuters in 2018 suggested that DJI could be worth as much as 15 billion U.S. dollars if a reported initial public offering goes ahead this year, with the drone manufacturer controlling 70 percent of the global commercial and consumer drone market.

Several Chinese companies have struggled with corporate corruption in recent years. In December the head of video-streaming platform Youku was detained on suspicion of economic crimes.

Earlier that month, Meituan Dianping, one of China's biggest retail services and food delivery platforms, announced that 89 employees had been investigated for corruption.