9 Taobao stores shut for bribery

HANGZHOU - Nine stores using Taobao.com, China's largest online retail platform, have been closed and permanently barred from the Internet shopping platform after they allegedly bribed Taobao employees for illegal gains, Taobao owner the Alibaba Group said in an open letter on Friday.

One store owner has been arrested and the owners of four other stores released on bail, according to Alibaba.

The business owners are suspected of conspiring with Taobao employees to cheat consumers by removing negative feedback posts and raising their credit ratings.

Alibaba said in the open letter that future violators will also have their online stores closed and be turned in to police if necessary.

This is Alibaba's first anti-corruption move targeting business owners, after previous initiatives largely targeted its employees.

The company set up a department of integrity in 2010 to handle customers' reports on illegal activities concerning Taobao employees. Members of the company's senior management have resigned or been dismissed over suspicions of fraud in the past two years.

The latest case involved five employees of Juhuasuan.com, a collective buying website of Taobao. They were detained or arrested for taking bribes.

"Only with honest business owners and Alibaba employees can Alibaba and the merchants achieve a win-win result. So it is hoped that merchants can work with Alibaba to fight against corruption and build an honest business environment," said Jiang Fang, head of the integrity department.

Taobao, which the Alibaba Group invested in during 2003, boasted over 500 million users and registered an annual sales revenue of 600 billion yuan ($95.5billion) in 2011, accounting for 80 percent of China's online shopping, according to statistics released by the company.