After a three-month investigation, Chinese e-commerce giant JD.com’s logistics unit Dada Nexus Ltd. confirmed that the company had inflated revenue figures and costs to hit its revenue targets, reports Caixin. He Huijian, the Dada President, will resign after the independent review is complete.
Fraudulent transactions resulted in revenue being overstated by about RMB 568 million ($79 million) and operating costs by RMB 576 million from the fourth quarter of 2022 to the third quarter of 2023, according to the investigation.
The independent review came after financial fraud was discovered during the company’s internal audit. Dada announced in January that suspicious behavior was found in its internal audit process, and the preliminary investigation estimated that the revenue from online advertising and marketing services as well as operating costs in the first three quarters of 2023 might have been overstated by RMB 500 million. Dada’s Nasdaq-listed share price fell 46% that day.