Youngest Baidu vice-president resigns after reported corruption scandal

Li Mingyuan, regarded as successor to founder Robin Li, resigns amid accusations of conflicts of interest with connected companies

PUBLISHED : Sunday, 06 November, 2016, 12:21am
UPDATED : Sunday, 06 November, 2016, 12:21am

Li Mingyuan, the youngest vice-president of Baidu, has resigned amid a reported scandal of undisclosed transactions and ethical violations, putting the mainland search engine under the spotlight once more as the company deals with its tarnished reputation following a scandal over paid search listings.

In an internal memo circulating online on Friday night, Baidu’s professional ethics committee said the company received a tip-off regarding Li’s wrong­doings and launched an investigation.

“In an acquisition, Li Mingyuan had a tremendous amount of economic dealings with the person in charge of the acquired company, [and] in a business operation under his management, Li had a tremendous amount of economic dealings with the person in charge of a gaming company partner of Baidu. Meanwhile, Li failed to report to Baidu that an external company in which he had stakes had business affiliated with Baidu.”

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Such behaviour violated Baidu’s rules on conflicts of interest and professional ethics, the memo said. It added Li admitted his wrongdoings and the company accepted his resignation.

Baidu declined to comment on the issue before the Sunday Post went to press. But it marks another scandal this year following public outrage over its paid search guidance for cancer therapy that led to the death of 21-year-old student Wei Zexi in April.

Wei’s death led to the country’s military and health authorities investigating whether some medical institutions had paid Baidu to feature their details prominently in search results.

Baidu, which charges advertisers for ranking them high in its online searches, has tightened internal controls following the credibility crisis. The committee dismissed another vice-president, Wang Zhan, in May for violating professional ethics.

Li was widely seen as the successor to Baidu founder Robin Li Yanhong and was even called the “crown prince” by insiders before his resignation.

He joined Baidu in 2004 when he was a sophomore at the Communication University of China. He was promoted in July 2013 at the age of 29 as the company’s youngest vice-president in charge of mobile business. His career reached its peak the following year when he became a member of E-staff, Baidu’s top decision-making group.

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Li later responded on the social media platform WeChat Moment, denying any involvement in corrupt activities. He said economic dealings do not mean “improper” dealings, but admitted that he realised such behaviour would lead to “misunderstandings”.

“For a senior executive, many things remain out of bounds to avoid risks, but I did not do enough and failed to meet the demands of a senior executive. I should recognise the mistakes and leave,” he wrote.

“I have never thought about doing, nor would I do, anything immoral to harm Baidu.”

Nasdaq-listed Baidu reported its first decline in revenue in the third-quarter earnings report after its listing due to the tightened standards for online advertising business.

Robin Li warned that the worst was not yet over for the company.