Alibaba announced on April 27 that Jiang Fan, the head of its e-commerce business units and a partner at the company, will be demoted as a punishment for his personal scandals damaging the company's image.
Jiang will be removed as one of the company's 38 partners effective immediately, and demoted from Senior Vice President to VP, down one level from M7 to M6, according to Alibaba's internal managerial level guidebook. He will also be deprived of all bonuses from the previous financial year.
Jiang will still keep his job as the head of Alibaba's Taobao and Tmall, two of China's leading e-commerce websites.
Earlier this month, Dong Yang, wife of the executive, accused of Zhang Dayi, a popular Chinese influencer who also runs several fashion-focused companies that operate on Alibaba's platforms, of seducing Jiang.
Ruhnn Holdings, Zhang's holding company, owns several of the top performing shops on Tmall and Taobao, and was invested by Alibaba in 2016.
An internal investigation that began two weeks ago found that dealings between Ruhnn Holdings and the business units Jiang leads did not show signs of misconduct, such as profit transferring. Jiang was not included in the decision that led to Alibaba investing in Ruhnn Holdings.
The investigation found, however, that Jiang's failure to properly handle his family affairs had caused a public opinion crisis and severely damaged the company's reputation.
Jiang, 35, is one of the youngest top executives at Alibaba. Started as an engineer in Google China, he later went on to co-found Umeng, the mobile-focused data services provider that Alibaba acquired in 2013.
Widely speculated both internally and externally to become the next CEO of Alibaba, Jiang became the president of Taobao in 2017, and took over Tmall in 2019.
Jiang is also a member of Alibaba's strategic execution committee.