Uber embroiled in bribery scandal in Asia – Malaysian, Indonesian businesses implicated in allegations

Uber embroiled in bribery scandal in Asia – Malaysian, Indonesian businesses implicated in allegations

Ride-hailing service Uber is in hot soup in the United States over its dealings in Asia. The San Francisco-based startup is under federal investigation into allegations of overseas bribery in the world’s largest continent, with its businesses in Malaysia and Indonesia implicated in the scandal, according to Bloomberg.

Sources said that Uber is already reviewing its Asia operations and has notified US officials about payments its staff in Indonesia made to authorities there. The company is examining records of foreign payments and interviewing employees, which raised questions as to why some “potentially problematic” deals were not revealed sooner.

In Malaysia, investigations centre around a corporate donation made to the Malaysian Global Innovation and Creativity Centre (MaGIC), worth tens of thousands of dollars, that Uber announced in August 2016. Soon after that, the government’s civil sector pension fund, the Retirement Fund Incorporated (KWAP), made a US$30 million (RM125.7 million) investment into Uber.

These arrangements may have influenced lawmakers here, Bloomberg stated, as less than a year later, the government began legalising “e-hailing” services like Uber, and even allocated a RM4,000 rebate on a Proton Iriz for BR1M recipients interested in becoming an Uber or Grab driver in Budget 2017. As such, lawyers are determining if there were any quid pro quo dealings involved.

“We strongly refute our involvement in any quid pro quo arrangements,” a MaGIC spokeswoman told the publication via email. Uber’s former business executives, Emil Michael and Eric Alexander, are said to have been instrumental in working out those deals, said sources.

Uber embroiled in bribery scandal in Asia – Malaysian, Indonesian businesses implicated in allegations

Uber was also reportedly entangled in a dispute with Indonesian police late last year over the location of an office in Jakarta, which was providing support to local drivers. After officers informed the company that the facility was outside the city’s zoning for businesses, an employee began making multiple small payments to the police in order for to continue operations there.

The transactions showed up on the employee’s expense reports as payments to local authorities. Uber is said to have fired that employee since, and the head of its Indonesian arm Alan Jiang – who approved the expense report – was placed on a leave of absence and has since left the company. Jiang did not respond to Bloomberg‘s request for comment.

Aside from the two countries in South East Asia, there are also investigations into deals in China, Korea and India, although details are less clear. This is just one of at least three federal inquiries into the company – previously, its law firm O’Melveny & Myers advised self-driving car startup Otto on its sale to Uber.

Google’s parent company Alphabet is now suing Uber over trade secret claims concerning the deal. Meanwhile, Uber requested its law firm to increase its focus on its probe into allegations in India, resulting in an expanded scope of the investigations.

Several top executives have already left Uber as a result of the increasing amount of scandals, including former CEO Travis Kalanick, who was ousted by investors who saw him as a liability to the company. Its head of compliance left this month, and chief legal officer Salle Yoo also announced her intention to leave after a successor is found. Also set to leave is head of Asia operations Michael Brown, he said yesterday.

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Jonathan Lee

After trying to pursue a career in product design, Jonathan Lee decided to make the sideways jump into the world of car journalism instead. He therefore appreciates the aesthetic appeal of a car, but for him, the driving experience is still second to none.

 

Comments

  • Aiya biasa la “malaysia truly asia”

    Like or Dislike: Thumb up 3 Thumb down 1
  • Proton Oh Proton on Sep 20, 2017 at 7:30 pm

    Ha ha. Same like the Putrajaya workers. All suka makan suap

    Like or Dislike: Thumb up 4 Thumb down 1
  • Grabriel on Sep 20, 2017 at 7:37 pm

    Ehh..why r we not surprised ?

    Like or Dislike: Thumb up 14 Thumb down 0
    • Osman on Sep 21, 2017 at 12:47 pm

      Malaysia Darul Rasuah

      Like or Dislike: Thumb up 12 Thumb down 0
    • lilytan on Sep 21, 2017 at 1:49 pm

      Unsurprisingly. It is odd when US Based uber was given special preference and investment while home grown Grab was not. Now we know why

      Like or Dislike: Thumb up 9 Thumb down 0
  • Desperato on Sep 20, 2017 at 9:03 pm

    Hai ya no wonder la. To introduce ehailing service to a fresh country like ours, one has to act fast and strike early, else if you come in second, there’s no incentive left. You see why Lyft isn’t here in Malaysia yet? Bcos Grab n Uber are dominating the pond right now, come in will get annihilated. Grab is successful because it start out in Singapore, government institution is more inclusive there so less obstacles n red tape, diu if you start here at Malaysia see? Red tape until pokai also cannot push ur business big. I have always wondered la, how Uber got into Malaysia so easily, oh now we know something fishy is happening (as always) behind the scene. Not to persecute them la, but just want to vent how difficult it is (in real life) to do business in Malaysia without having to get involved in these shady fishy stuff. Foreign dude got money baru can get into the game, so how about us? Can change government try and see? I am 20 y.o only leh, I dont want so young pun give up hope.

    Like or Dislike: Thumb up 11 Thumb down 5
    • Grab started in Malaysia actually before moving their HQ to Singapore…

      Like or Dislike: Thumb up 2 Thumb down 0
    • kzm (Member) on Sep 21, 2017 at 1:23 pm

      Grab start in bolehland though not Singapore.

      Like or Dislike: Thumb up 2 Thumb down 0
    • mcmsgbagussgt on Sep 21, 2017 at 3:10 pm

      Grab was my Teksi in malaysia..in start and grew in malaysia…the teksi love them..but they want bigger pie …kill my Teksi changw to Grab to grab more money….

      Like or Dislike: Thumb up 2 Thumb down 0
    • Nazir on Sep 22, 2017 at 9:46 am

      Desperato – go do your homework before you comment. Grab was developed and was started in Malaysia, not Singapore.

      Like or Dislike: Thumb up 3 Thumb down 0
  • RicoT on Sep 20, 2017 at 10:46 pm

    Still better than taxi gengster in the past… Again, it is just standard operating procedure in Malaysia/Indonesia.

    Like or Dislike: Thumb up 10 Thumb down 1
  • Sheikh Songkok on Sep 20, 2017 at 11:37 pm

    Donation ma, not bribery

    Like or Dislike: Thumb up 14 Thumb down 0
  • David on Sep 21, 2017 at 5:57 am

    This is not a news (nothing is new here in Bolehland).

    Like or Dislike: Thumb up 4 Thumb down 0
  • azrai on Sep 21, 2017 at 8:25 am

    DOJ & Malaysia G berpisah tiada..

    Like or Dislike: Thumb up 4 Thumb down 0
  • Where is John? on Sep 21, 2017 at 9:24 am

    No 1 man already korup, so, no big deal others are also korup

    Like or Dislike: Thumb up 11 Thumb down 0
  • Ben Yap on Sep 21, 2017 at 10:05 am

    All Uber do is at the expense of someone else. some unfortunate employees under the directive of the management was fired for the scandal. what a scapegoat!

    on top of that, there are thousands of unsatisfied drivers because of the incentive and fare cuts.

    all in all, i support grab and not uber.

    Like or Dislike: Thumb up 2 Thumb down 2
  • Semi-Value (Member) on Sep 21, 2017 at 11:54 am

    biasa la ini

    Like or Dislike: Thumb up 2 Thumb down 0
  • Why am I not surprise when i read this article? You scrath my back, i scratch yours.

    Like or Dislike: Thumb up 5 Thumb down 0
  • Osman on Sep 21, 2017 at 12:48 pm

    Malaysia Darul Rasuah

    Like or Dislike: Thumb up 3 Thumb down 0
  • Proton oh Proton on Sep 21, 2017 at 1:16 pm

    its donation ok… its normal practice in Malaysia. No wrong doing k. Relax

    Like or Dislike: Thumb up 2 Thumb down 0
  • stasta on Sep 25, 2017 at 10:46 am

    uhh you guys are just proving his main point. grab fled from malaysia to singapore because local red tape was too big a barrier for business expansion… unless grab also follow uber to bribe gov officials.

    Like or Dislike: Thumb up 1 Thumb down 0
 

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