DJI uncovers massive employee fraud scheme

Dronemaker DJI unearthed a massive case of employee fraud happening via an internal probe, in what could have cost the company up to 1 billion yuan ($150 million).

Employees were inflating the cost of parts and materials for personal gain. DJI responded by firing a number of employees, alerting law enforcement, and also set up new internal channels for employees to submit confidential and anonymous reports relating to any violations of the company’s workplace conduct policies.

DJI added in a statement that it not incur a full year loss in 2018.

DJI discovered the employee fraud corruption via an internal probe and has fired at least some of the workers involved. According to Reuters, news of the massive embezzlement began on Friday when an internal document regarding the incident was shared on Chinese social media.

DJI did not disclose how many employees were involved, but the Financial Times reported it could be as high as 29 employees.

“DJI holds our employees to strict ethical standards and takes any violation of our code of conduct very seriously,” DJI said in a prepared statement. “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.”

DJI is far and away the world’s largest drone maker, making popular drones including the DJI Mavic Air, DJI Phantom and DJI Mavic Pro. The company employees about 14,000 people globally. The DJI market share is now at an estimated 74%, up from 72% in 2017, according to the 2018 Drone Market Sector Report by Skylogic Research.

DJI is a privately held company and thus does not disclose its financials, but in 2018 was said to have a $15 billion valuation in light of discussions around a new round of funding that would have raised between $500 million and $1 billion. That would mark the biggest round ever raised by DJI, whose previous $75 million fundraising from Accel Partners in 2015 valued it at $10 billion.