The world's largest drone-maker, DJI, has reported that it will take a loss of up to a billion yuan ($150 million) due to employee fraud, according to Bloomberg and other sources. The company said that it fired multiple employees who apparently inflated parts costs to pad their own pockets. DJI discovered the "extensive" corruption during an internal probe and has contacted law enforcement.
The corruption probe is one of the largest ever in the recent history of Chinese tech, according to Bloomberg. "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," the company said. According to the government-run China Securities Journal, over 40 individuals at the company have been investigated.
Since a crackdown by President Xi Jinping, Chinese companies have been forced to deal harshly with corruption lest they face serious consequences. DJI is a particularly high-profile company, as it has 14,000 employees and owns three-quarters of the drone market, thanks to consumer models like the recent Mavic 2 and a burgeoning commercial business.
"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 workplace conduct policies," it said in a statement. "We continue to investigate the situation and are cooperating fully with law enforcement's investigation."
Update 1/21/2019 6:41 AM ET: DJI has given the following statement to Engadget:
DJI holds our employees to strict ethical standards and takes any violation of our code of conduct very seriously. During a recent investigation, DJI itself found some employees inflated the cost of parts and materials for certain products for personal financial gain, which DJI estimates could have cost the company up to RMB 1 billion. However, DJI did not incur a full year loss in 2018.
DJI took swift action to address this issue, dismissed a number of employees who violated company policies, and contacted law enforcement officials. We continue to investigate the situation and are cooperating fully with law enforcement's investigation.
These actions do not represent DJI, our culture, or our 14,000 employees, who work hard every day to serve customers and develop cutting-edge technologies. 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 workplace conduct policies.