Chinese e-Commerce firm Alibaba.com CEO David Wei and COO Elvis Lee have resigned following a rise in fraudulent transactions.
More than 2,000 fraudulent virtual storefronts were found by an internal probe to have been set up with the help of company salespeople.
Alibaba said in a statement that most trades involved offering popular consumer electronics at bargain prices with a low minimum order value to entice buyers.
The company defended its outgoing executives by saying they were not personally involved in any of the claims, but were resigning to take responsibility for a "systemic breakdown."
Recently, the e-Commerce firm had to pay out $1.7m as a result of the claims.
The investigation’s results are also a black eye for Alibaba’s founder, Jack Ma who may now step back into day-to-day management to ensure the ‘values of Alibaba’ are enforced.
Alibaba.com has appointed Jonathan Lu Zhaoxi, currently chief executive of the unlisted online retailer Taobao, as its new CEO.
