Yang Weidong, president of Chinese vide streaming behemoth Youku has stepped down amid rising tensions in the Chinese film industry. Youku is Alibaba Group Holding Ltd’s video streaming service and is currently witnessing a major reshuffling in the pecking order.

According to a spokesperson of the company, Yang resigned from his post in order to aid the Chinese police with an investigation into “an alleged case of seeking economic benefits”. This isn’t the first time the company has been confronted with the government authorities. Back in 2016, Lu Fanxi, former vice president of Youku had been taken away by the police. He had been suspected of using his position to carry out illegal activities.

Yang Weidong would be handing over his reigns to Fan Luyuan, Chairman and CEO of Alibaba Pictures. Yang previously worked at executive positions at Nokia Greater China and Lenovo before coming onboard Youku in 2013. Youku was later bought by the e-Commerce mammoth Alibaba in 2015. According to Chinese financial magazine – Caijing, Alibaba had already been investigating Yang suspecting him of corruption before the authorities got involved. He is currently being questioned regarding the “Economic benefits” which involve over 100 million yuan (14.6 million USD ). The said economic benefits are allegedly tied to Youku’s Reality TV show “This Is” which is popular among the younger viewers and the millennials.

Industry veterans suggest that corruption has become an unspoken rule in China’s online video sector.  “This can include bribes for actors as well as yin-yang contracts between studios and the actors,” said a Shenzen based digital media investor who wishes to remain unidentified.  The Chinese government is in full crackdown mode to expose these blatant malpractices. In October, regulators fine top-earning actress Fan Bingbing, nearly $70 million over tax evasion. Fan has also acted in a couple of Hollywood superhero flicks such as X-Men Days of Future Past and Iron Man 3.

Over the past few years,  Alibaba’s Youku and its fierce competitors Baidu, Tencent have been involved in acts of corruption. These companies are now showing signs of stress as President Xi Jinping tightens his grip over the wrongdoings in this sector.

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