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High-flying Alibaba executive demoted over personal scandal

Weibo post sparked speculation over Tmall and Taobao president Jiang Fan

Jiang Fan, president of Alibaba's Taobao and Tmall, attends the Chinese e-commerce group's Singles' Day global shopping festival in Hangzhou in Novebmer 2019.   © Reuters

BEIJING (Financial Times) -- A top Alibaba executive and one-time contender to take charge of the e-commerce giant was demoted on Monday after a personal scandal erupted involving his wife and an internet celebrity who sells goods on its platforms.

Jiang Fan, the 34-year-old president of Alibaba's key Tmall and Taobao e-commerce units, "improperly handled his family problems, triggering a serious public relations crisis which harmed the company's reputation," a company investigation concluded, according to an internal notice seen by the Financial Times.

Alibaba stripped Mr Jiang of his place among the company's 38 partners, who lead the company, set its culture and vote on the make-up of the majority of its board. The company also voided his bonuses and lowered his rank from the equivalent of a senior vice-president to a vice-president.

Though Mr Jiang retains his position at the top of Alibaba's ecommerce units, the punishment marks an abrupt fall from grace for the once high-flying executive. Mr Jiang joined Alibaba in 2013, when the company bought his mobile app analytics start-up. He took over Taobao in 2017, followed by Tmall and then the advertising unit Alimama last year, when he also became the youngest member of the Alibaba partnership.

The personal scandal erupted earlier this month when an internet user - whom netizens identified as Mr Jiang's wife - warned influencer Zhang Dayi to stay away from her husband on the Twitter-like Weibo. "This is the first and last time I'm warning you, come and tease my husband again and I won't be restrained any longer, this woman is not easy to fight with," she wrote.

The post attracted widespread attention and sparked speculation that Mr Jiang and Ms Zhang were having an affair. Ms Zhang also holds a stake in the influencer talent agency Ruhnn Holding, which listed on Nasdaq last year and counts Alibaba as an investor. Mr Jiang apologized in an Alibaba internal forum but has not commented publicly.

"Alibaba is very intolerant of extramarital affairs, thinking it will hurt the company's image, especially since the majority of Tmall and Taobao's customers are female," said one former Alibaba employee.

The company requires employees to abide by a strict code of ethics. In 2011, Alibaba replaced its chief executive after sales staff were found to have helped set up fraudulent online shop fronts on its Alibaba.com platform. Alibaba's investigation did not find any improper business dealings between Mr Jiang and Ms Zhang, according to the notice.

Li Chengdong, chief executive of e-commerce think-tank Haitun, said it was unlikely Mr Jiang would be promoted back into the Alibaba partnership. The company's governance manual lists "personal character" as a top criterion for partnership admittance.

Still Mr Li said the punishment was relatively light. "They need Jiang Fan right now, they are competing with Pinduoduo and JD.com, they don't have another viable person to take over," said Mr Li.

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