DJI Responds to Fraud Findings: Vows to Deal with “Outright Theft” and Asks Media to “Pay Close Attention”

DJI is taking active steps to respond to the media firestorm resulting from their internal fraud investigation.

Earlier this month, the company announced its findings that internal employee theft had led to huge company losses estimated at $150 million. Now the company has released an open letter responding to the situation and asking the media to “pay close attention to the facts…”  as they defend themselves against the rumors and negative publicity that the intial story has created. Rumors of a 2019 IPO for the company may make it even more imperative for the drone giant to fight back.

In their initial statement on the situation, DJI said that “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….DJI took swift action to address this issue, dismissed a number of employees who violated company policies, and contacted law enforcement officials.”

Since then, the company has released a second letter which says that “DJI has discovered instances of cost inefficiency, purchasing manipulations and outright theft,” that they plan to “uncover and eliminate.”

As the drone industry’s largest player, DJI has over 14,000 employees – and it’s unclear if the thefts were the act of only a few bad apples or were indicative of a widespread problem.  Technode reports that the company has investigated 45 employees: firing 29 and referring 16 to the police – while not the action of only one or two, still a tiny fraction of the workforce.  But with several of China’s leading technology companies fighting internal corruption, DJI finds itself in a negative spotlight.

In the latest statement, DJI accepts responsibility for loose management practices – the inevitable outcome of such rapid growth – and pledges to “take a leading role in developing clear policies, procedures and expectations to address corner-cutting and employee theft.”

While we found only these two statements on DJI’s English language newsroom, the Global Times reported that another DJI letter addressing the issue was made public, defending the company against the rampant rumors that the initial corruption finding has spawned. “Some former DJI employees tried to vindicate themselves and spread rumors both inside and outside the company, such as accusing the anti-corruption investigators within the company as forming cliques, the letter said,” reports the Times.

…’The investigation and evidence collection of corrupt practices are very hard,’ it said, ‘even if behavior, credit losses or corruption are found, few of those people will lose their jobs; some employees published anonymous articles online which have resulted in negative pressures from adverse public opinion. These are all issues that DJI is currently experiencing.’ ”

The fact that the company discovered the problem themselves, their move to review and tighten processes, and the firm action taken so far should help to reduce the damage from the initial discovery.  Despite this negative press, DJI continues to be the global leader in drone technology – and with a market share estimated at somewhere between 65% and 85%, depending upon which analyst you consult, they remain a dominant force in the industry.