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Baidu starts internal probe into 3 top managers

China Daily, May 12, 2015

• Search engine giant Baidu Inc has been put under the spotlight after local media reported that the group has launched an internal anti-corruption investigation against three of its departmental directors.

  Baidu officials admitted that the company was conducting the investigation but declined to offer any details on the inquiries. Additionally, the Internet search company refused to confirm how many staff members were being investigated.

  "Internal anti-corruption action creates a fair and transparent working place, and a healthy environment for workers' development," Baidu officials told China Daily in an e-mailed response.

  "We ask our staff to respect the company ethics and national laws, to create a healthy and fair working environment," the statement said.

  Analysts said that Baidu's decision to launch an internal probe could be regarded as a clear sign that the company is taking serious action to maintain its credibility and show that it would not tolerate any misconduct.

  Neil Flynn, a portfolio manager based in Shanghai at the United Kingdom-headquartered Alcuin Asset Management, said: "From Baidu's point of view, it is much better to publicly announce the investigation, because it shows that they are actively stamping out corruption within the firm."

  Neil Shah, research director at market research firm Counterpoint Technology Market Research, said: "This (action) will set a precedence for Baidu and other Chinese companies to closely monitor employee practices in this important 'information age', where soliciting or misusing information can have adverse consequences on the user, the company or any business associated with it."

  Although not directly related, anti-corruption investigations in private companies have increased since President Xi Jinping launched in 2012 a national anti-graft and austerity campaign to fight misconduct among officials.

  "Corruption used to be a major issue for Chinese companies, but since the start of Xi Jinping's presidency, there has been a notable decline, because the government is strict on such illicit practices," said Flynn.

  In 2012, Baidu announced for the first time it was launching an internal investigation to tackle wrongdoings in the company. At that time, the search engine group dismissed four of its employees for bribery. In November last year, Baidu also made headlines for having fired five executives for bribery and illicit appropriation.

  But Baidu has not been the only Chinese company to have carried out an internal probe to identify inappropriate behavior among employees.

  In 2011, Alibaba Group Holding Ltd said that two of its senior representatives were resigning to accept responsibility for the company having granted "golden status", a mark of supposed integrity, to over 2,000 dealers that had defrauded buyers.

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