Alibaba demotes top executive after probe into behaviour, source says

Chinese e-commerce giant Alibaba Group Holding Ltd has demoted Jiang Fan, one of its most senior executives, after an internal investigation into allegations of improper behaviour, according to a person familiar with the matter.

Alibaba removed Jiang, who oversaw the company's main online shopping divisions, from a partnership of 38 people, which appoints some Alibaba board members. It also demoted him to group vice president from group senior vice president, said the person, who asked not to be identified discussing internal matters.

Alibaba declined to make Jiang available for interview and he did not respond to a Reuters request for comment.

The decision follows speculation on Chinese social media about Jiang's relationship with a prominent social media influencer, Zhang Dayi, and whether he had used his influence at Alibaba to ensure preferential treatment to merchants associated with Ruhnn Holding Ltd, an e-commerce company where Zhang serves as Chief Marketing Officer.

A spokesman for Ruhnn declined to comment. A representative for Zhang did not immediately respond to a request for comment.

Alibaba bought a stake in Ruhnn in 2016. Ruhnn went public last year.

In its internal investigation, Alibaba concluded that its investment in Ruhnn "has nothing to do with Jiang Fan" and that Ruhnn stores had not benefited from Jiang's influence, according to a note to all staff seen by the person.

But the note also said that due to "inappropriate handling of family affairs," Jiang had "triggered a serious public opinion crisis which created a major impact on the company's reputation", according to the memo.

The online furore about Jiang comes as Alibaba recovers from the impact of the coronavirus, which saw deliveries temporarily come to a halt as the country went into a nation-wide, weeks-long state of semi-quarantine.

Jiang joined Alibaba in 2013 after selling his app analytics company Umeng to the e-commerce giant. He is credited with boosting Alibaba's transition away from the desktop and towards purchases on mobile phones.

He was seen by some as a potential successor to current chairman Daniel Zhang, who took over Alibaba from Jack Ma formally in 2019.