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Anti-countefeiting group suspends Alibabas' membership

14 May 2016

Alibaba Group Holding Ltd's membership of an anti-counterfeit group have been suspended a month after the Chinese internet giant joined, as questions emerged about conflicts of interest involving the coalition's president and complaints from some members.

The International AntiCounterfeiting Coalition, (IACC), a non-profit global organisation fighting counterfeit products and piracy, created a new membership category in April that allowed Alibaba join.

Alibaba has been trying to shed its image as a cheap brand supplier. However, its inclusion was resented by some members who said the company was not doing enough to kill fakes from its online marketplaces.

According to the IACC board, conflicts of interest involving president Bob Barchiesi were not communicated to directors, due to a ''weakness in our corporate governance procedures.'' Consequently, IACC is putting on hold the new membership classification to allow ''further discussion and consideration,'' according to a letter from the IACC board. Two other e-commerce members and The RealReal, were also suspended.

The Associated Press reported earlier yesterday that Barchiesi held Alibaba stock, had close ties to a company executive and had used family members to help run the coalition.

The IACC board said Barchiesi disclosed his financial transactions and relationships, though the board was not told about "certain aspects" of his "disclosed conflict."

According to the group it was hiring an independent firm to review its corporate governance and implement new measures, according to the letter, which came out after the AP report.

"My investments are completely independent from my work in anti-counterfeiting," Barchiesi wrote in an email forwarded by an IACC representative to Bloomberg News. "The stock represents a small percentage of my investment portfolio. I also have shares in companies that happen to be a member of the IACC."

Meanwhile, earlier this month, Alibaba said its online shopping platform Taobao was tightening controls on the sales of luxury goods, requiring sellers to show proof of authenticity, as it fought sale of fake items.

"Whether or not we are a member of the IACC, we will continue our productive and results-oriented relationships with brands, governments, and all industry partners," said Jennifer Kuperman, Alibaba's head of international affairs, Reuters reported.

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