Corruption at DJI may cost the company $150 million

NelsonG · January 18, 2019

DJI, the world’s leading maker of consumer drones, said today that extensive corruption discovered within the company could lead to losses as great as $150 million in the 2018 financial year. The exact nature of the corruption is not stated, but it seems to involve dozens of people at the least.

The China Securities Journal, a state-operated finance-focused newspaper, got hold of an internal company report on a corruption investigation that said some 40 people had been investigated so far, but the numbers may also be as high as 100.

Reuters confirmed with the company that it “set up a high-level anti-corruption task force to investigate further and strengthen anti-corruption measures,” and that “a number of corruption cases have been handed over to the authorities, and some employees have been dismissed.”

When contacted for details, DJI offered a statement (just after this post went live) partly explaining the situation:

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.

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.

It’s a little hard to believe that people padding invoices and giving sweetheart deals to certain contractors for kickbacks could amount to more than a million dollars per person involved, but then again, DJI makes a lot of hardware and a few well-placed people could siphon off quite a bit.