Internal Corruption Scandal at DJI Leads to $150m Losses

Not all is well on home soil for Chinese drone manufacturer and industry leader DJI. The company has discovered a devastating level of internal corruption that in turn has caused 2018 losses in the region of $150 million.

On Friday the company confirmed more than 1 billion yuan had been lost last year, and that an investigation is ongoing and is now in the hands of local police.

“DJI condemns any form of corruption strongly and has set up a high-level anti-corruption task force to investigate further and strengthen anti-corruption measures,” it said.

“A number of corruption cases have been handed over to the authorities, and some employees have been dismissed,” it added.

DJI Employees Inflate Material and Parts Costs before Skimming Off the Top

In a further statement, the company explained that”during a recent investigation, DJI itself found some employees inflated the cost of parts and materials for certain products for personal financial gain. We took swift action to address this issue, fired the bad actors, and contacted law enforcement officials. We continue to investigate the situation and are cooperating fully with law enforcement’s investigation.”

The sheer scale of corruption is staggering in terms of the company’s 2018 revenue. It seems a small group has made a lot of money before anyone with the power to do anything about it realized what was going on.

The state-run China Securities Journal cited an internal company report on corruption, which said that more than 40 people at privately-held DJI had been investigated.

But those employees are a drop in the ocean for DJI. The manufacturer’s human resources department has been quoted as saying it employed 12,000 people at the end of 2018, with an expectation that the figure will grow to 14,000 by the end of 2019.

“We are taking steps to strengthen internal controls and have established new channels for employees to submit confidential and anonymous reports relating to any violations of the company’s ethical and workplace conduct policies,” concluded the statement.

Malek Murison is a freelance writer and editor with a passion for tech trends and innovation. He handles product reviews, major releases and keeps an eye on the enthusiast market for DroneLife.
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