The phenomenal growth of Alibaba has made many of its executives very rich but life outside the online retailer can be challenging - as former chief operating officer Li Qi has discovered.
Li Qi joined Alibaba in 2000 just a year after the company was founded by Jack Ma. Li rose to become COO in 2005 but left the retailer three years later to study and become an entrepreneur.
However, a report by the
Huffington Post has revealed that life outside Alibaba has been turbulent for Li Qi. For example, an investment in Dazuiba, an online food retailer, has struggled and the company was
forced to pull out of Chinese markets including Beijing and Shenzhen in 2014.
But Li’s most costly investment to date has been in Zetta Jet, a private jet operator based in Singapore.
Li invested $19 million in Zetta in 2016 and took a 10% stake in the business. He then invested a further $40 million last year to increase his stake to 30%, just as the company was teetering on the brink of bankruptcy.
Li also made loans of $70 million to Zetta via his offshore companies Truly Great Global Ltd., Universal Leader Investments and Glove Assets Investment.
When Zetta declared bankruptcy in August last year, Li Qi was
listed as a creditor owed $90 million by the company. His total losses could be as high as $130 million including the equity investments.
However, the financial losses may not be the only damage Li suffers as a result of the collapse of Zetta Jet.
The company was set up by Geoffrey Cassidy and two other partners, James Seagrim and Stephen Walter. Seagrim and Walter
claimed last year that Cassidy had looted up to $30 million from Zetta by using company money to finance a lavish lifestyle that included purchasing yachts and luxury cars. The directors also alleged that their former business partner had received $2 million
in kickbacks for every private jet acquired by Zetta.
US bankruptcy motion accuses Cassidy of “fraud, embezzlement, breach of fiduciary duty, defalcation and self-dealing at a loss of millions of dollars to Zetta Jet”.
The authorities in the United States are
reportedly investigating these allegations and Li Qi’s role at Zetta is likely to be scrutinised given that he sat on the company’s board of directors while these alleged crimes were taking place.
According to the
Huffington Post, creditors are also examining millions of dollars in payments made to Li in the months before Zetta collapsed. These payments were made into Li’s US bank accounts, thus enabling the former Alibaba executive to secretly move money out of
When Zetta ran into money troubles last year, Seagrim and Walter sought to put Zetta into Chapter 11 bankruptcy protection but this move was challenged by Cassidy, with Li’s support. When the allegations against Cassidy emerged, he was removed from his role
as chief executive of Zetta Jet.
Li Qi attempted to bail out Zetta Jet and offered to bring in new investors from China. However, the deal failed to materialise and Zetta filed for bankruptcy.