Uber Conducts Asia-Wide Operation Review Amid Reports of Overseas Bribery
Amid U.S. federal probe, Uber’s India unit may face disruptions as the company’s law firm also looks into 2014 December rape case in Delhi.
Cab-for-hire app company Uber is set to review its Asian operations after facing a U.S. federal probe to check whether the company broke laws against overseas bribery. The charges surfaced after the U.S. officials were notified about payments made by staff in Indonesia.
As the parent company grapples with the exit of its top executives after a series of scandals, the latest review of its operations would be a major distraction in the Indian unit.
The review of operations delving into the foreign payments made and interview of employees will include countries such as China, India, Indonesia, Malaysia and South Korea.
Probe in Indonesia
Uber is facing a federal probe over happened late last year when the company had a run in with Indonesia police over the location of an office in Jakarta providing support to local drivers. As police officers said the space was outside city zoning for businesses, an employee decided to dole out multiple, small payments to the police in order to continue operating there, Bloomberg reported.
The transactions approved by Alan Jiang, the company’s head of Indonesia business, showed up on the employee’s expense reports as payments to local authorities. Uber fired the employee and Jiang was put on a leave of absence. He has since left the company.
Uber Under Scrutiny in Malaysia
In Malaysia, a corporate donation running into tens of thousands of dollars to a government-backed entrepreneur hub called Malaysian Global Innovation and Creativity Centre was announced in August 2016. At that time, a Malaysian pension fund, Kumpulan Wang Persaraan (Diperbadankan), had invested $30 million in Uber. A few months after this, the Malaysian government passed national ride-hailing laws, which benefited Uber and its peers. Lawyers are trying to see whether there was any form of quid pro quo.
Bloomberg quoted people knowledgeable on the matter as saying that Uber’s law firm is looking into a web of financial arrangements tied to the Malaysian government that may have influenced lawmakers there.
The Case of Eric Alexander
Emil Michael and Eric Alexander, two former executives at Uber, were involved in clinching the deals in both the countries, the report added.
Alexander, who used to head the company’s Asia Pacific operations, was fired earlier this year after media reports emerged about him and other Uber executives accessing the medical reports of a woman raped by an Uber driver in Delhi in 2014.
The company will look into business dealings Alexander may have had in connection with the 2014 rape case, the Mint reported citing sources familiar with Uber India’s operations. His role was first reviewed as a part of Uber’s wide probe on sexual harassment in which the company fired 20 people. Alexander was said to have shown the records to then Uber CEO Travis Kalanick and top executive Emil Michael, after which the three of them doubted whether the woman had been raped. The law firm is also checking whether other executives in India had acted inappropriately in the rape case.
“This matter will continue to be a major distraction for Uber in the foreseeable future. It’s not going to go away anytime soon. In fact, this is just the beginning,” said one of the sources to the Mint.
Asia Operations Under Review
All this is coming under the ambit of Uber’s law firm O’Melveny & Myers Llp, which is reviewing the company’s Asia operations. The December 2014 rape case was a watershed moment for Uber in India, following which the company was banned by the Delhi government for a few weeks. The company bounced back with stricter driver verification processes that included adding an SOS button on its app and launching an expensive public relations campaign, including television ads, to repair its image.
Former Expedia CEO Dara Khosrowshahi was named Uber’s new CEO after several months of hunt to replace Kalanick.