147 Million Dollar Loss?

[FASTFJR]

This can't be good....

DJI faces $147.6 USD loss after employees commit fraud - DroneDJ


Breaking News: DJI faces a $147.6 Million USD loss after a large number of employees commit fraud. DJI is currently investigating members of its staff regarding allegations of corruption that inflated product prices in the supply chain. 16 people have been reported to the authorities. We have reached out to DJI for their official response to this story. The Chinese drone maker told us that they will be sending out an official statement as soon as possible.












DJI faces $147.6 USD loss after employees commit fraud
DJI is investigating members of its staff regarding allegations of corruption that inflated product prices.
In total, more than 100 people have been involved and 45 employees (or former employees) have been placed under investigation. Some 16 people have been reported to the authorities.
The losses are expected to exceed CNY1 billion (USD147.6 million), which, according to this news source, is twice the amount of the firm’s year-end bonus in 2017.
DJI said to All Weather TMT that:

“The scope of corruption is much larger than expected, and we are now only dealing with the tip of the iceberg.”​

An industry insider has said that DJI is bringing together resources to build a “professional anti-corruption team.”
The Chinese drone maker has handed over to law enforcement, 16 of the former employees and another 29 people have been dismissed. Most of the worker, allegedly involved in the fraud are part of the research and development department and procurement division. A further 19 employees work in the sales, administration and design departments as well as in factories.
According to information from a report the average purchase price of components was inflated by more than 20 percent due to the supply chain corruption.
We have reached out to DJI for their official response to this breaking news story. DJI has informed DroneDJ that they are working on sending out an official statement as soon as possible.
We will update this story as the news develops.

 

[Thekidd76]

Depends on how you look at it I guess. The way I read it, now that they've rooted out the issues, the cost of their drones could drop by as much as 20% in the future!

 

[FASTFJR]

Depends on how you look at it I guess. The way I read it, now that they've rooted out the issues, the cost of their drones could drop by as much as 20% in the future!

So I guess they owe me 20% back on a bunch of my drones and other stuff I've bought from them?

 

[rickw]

hold your breath on that one

 

[FASTFJR]

hold your breath on that one

Lol

 

[AnotherMavicPilot]

So I guess they owe me 20% back on a bunch of my drones and other stuff I've bought from them?

Still waiting for my cheque...

 

[Starz]

Just means their profit picture will get better after they sort out the crud.

 

[JDawg]

Depends on how you look at it I guess. The way I read it, now that they've rooted out the issues, the cost of their drones could drop by as much as 20% in the future!

Sure, count on it.

 

[Former Member]

Maybe some of DJI's fraudulent employees will use the following statement when they are arraigned.

"To date, none of these reports have been confirmed, and there is no proof that any of these alleged incidents occurred."

That statement was DJI's response to this news article,

"DJI Urges Caution In Evaluating Reports Of Drone Incidents"

 

[AnotherMavicPilot]

Maybe some of DJI's fraudulent employees will use the following statement when they are arraigned.

"To date, none of these reports have been confirmed, and there is no proof that any of these alleged incidents occurred."

That statement was DJI's response to this news article,

"DJI Urges Caution In Evaluating Reports Of Drone Incidents"

Does he want a job as Prime Minister? (President)

 

[Former Member]

I guess the big question is how did this news outlet get this inside information? DJI is probably one of the most closed mouth, billion + dollar companies in the world, and how they let this leak is beyond me.

The companies valuation is almost $10 billion.

Ah, I just got a flash. If DJI is looking to go public, this is the perfect time to disclose this information, rather than after the IPO. If they wait until after the IPO to disclose this info, and after the stock price had skyrocketed, the company would be investigated, and probably forced to shut down until all the allegations had been brought out.

How do you say Bernie Madoff in Chinese?

 

[Former Member]

The article is a great read. Feels like something is lost in translation, and some things just dont make sense:

(Yicai Global) Jan.18 -- Chinese drone-maker DJI Technology is investigating its staff members regarding allegations of corruption which has elevated product prices. Some 16 people have already been reported to authorities.

So, wait. Exactly who at DJI realized that the prices were elevated? Elevated to whom? Retail? Distributors?

More than 100 people are involved while 45 employees or former ones have been placed under investigation,

So 100 were involved but only 45 are being investigated?

All Weather TMT reported. The losses are expected to exceed CNY1 billion (USD147.6 million), which is twice the amount of the firm's year-end bonus in 2017.

This is where they lost me. Does "firms year-end bonus" mean profit? I didnt know that companies get bonuses.

"The scope of corruption is much larger than expected, and we are now only dealing with the tip of the iceberg," the Shenzhen-based company said to All Weather TMT. DJI is gathering resources to build a professional anti-corruption team, an insider said.

DJI is building an anti-corruption team? DJI police? Ok...

The firm has handed 16 of the former employees to law enforcement and 29 have been dismissed.

Did DJI have these people in DJI jail? Citizens arrest?

At 26 people, most of the workers related to the anti-graft campaign are from the research and development department, as well as the procurement division. Some 19 work in sales, administration, design and factories.

Aside from the sales department, all the other departments would be benign in a fraud case.

The average purchase price of DJI exceeded a reasonable level by more than 20 percent due to corruption in the supply chain last year, the report added.

Ok, what does "a reasonable level" mean? Completely ambiguous statement. Whatever the sales price is, is a reasonable level. Who determines what price is reasonable?

Founded in 2006, DJI has 14,000 employees.

I think, by this report, they are now down to 13,900

Editor: Emmi Laine

 

[monchan]

"All Weather TMT reported. The losses are expected to exceed CNY1 billion (USD147.6 million), which is twice the amount of the firm's year-end bonus in 2017.

This is where they lost me. Does "firms year-end bonus" mean profit? I didnt know that companies get bonuses. "

I don`t know about China, but here in Japan companies fork millions in summer and end of year bonus` to their workers
Could be the same over there. But who knows??

 

[SCK]

This make no sense. If raw materials were over inflated then it would have been lower profit on past sales (compared to what it should have been). The only way they would have a future loss is if they refunded the inflated sales price which I don’t see happening. In the future DJI will either be more profitable or have a price reduction (doubt) based on correct RM pricing.

 

[DuffMog]

Just put my smart controller on hold.

 

[kaz911]

The normal scam is:

Vendor A sell parts to OEM

OEM (DJI) have some creative individuals - who then contact Vendor A and say - we are going to buy XX thousands of components. So what discount can you offer?

Vendor answer - 25%

OEM creative individual : ok we pay original ask minus 5% if you put the 20% discount into another bonus account over here and just invoice DJI with the 5% discount. Ohh and don't mind if the company name is DJI-Bonus and not DJI...

And 20% added to COST is about 2.5-4 x retail. So if cost of a Mavic after discount (to make) is $600 and component value is $400 DJI paid 20% too much - so roughly $80. That would impact potential sales price (SRP) with between 160 and 300! (If DJI wanted to maintain same profit ratio)

/k

 

[DaveMavicPilot]

It Sounds like what happened to Caterpiller Perkins Engine Production being produced through out the World, China Workers, white collar types, started cutting corners and in 2002 +/- Built a lot of engines that failed and thus Caterpillar Customers where left holding the bag (of crap). My company right now is dealing with a CAT906 with an engine issue we are just now learning about the Chinese made engine, so wide spread it is difficult to find a replacement under $10k.....so I wander how that new 2 Pro will turn out that was under your Christmas Tree.....Good Luck to All Who Purchase DJi

 

[Inspirephil]

Maybe this would explain why some of my orders were lost/misplaced or overpriced??
I don’t think we can expect any dramatic price drops in our future. Remember that DJI is still “Big Business” and that’s not going to change anytime soon, probably never!!

 

[MikeyMikeOZ]

The title of this thread sounds like the voices in my head if/when I crash my drone! Lmao

Back on topic.... unfortunately, we were buying these items at those prices, so I dont see DJI reducing the MSRP.

 

[jmvplayerMA]

Prices may or may not drop. Remember somehow this new task team that DJI is creating needs to get paid. So maybe they say that the extra money that they will save will now go to fund these “new DJI police”.
Just saying.