An anti-counterfeiting group said Friday it was suspending Alibaba’s membership following an uproar by some companies that view the Chinese e-commerce giant as the world’s largest marketplace for fakes.
The International Anti-Counterfeiting Coalition told members that it had failed to inform the board of directors about conflicts of interest involving the group’s president, Robert Barchiesi.
Earlier Friday, The Associated Press reported that Barchiesi had stock in Alibaba, had close ties to an Alibaba executive and had used family members to help run the coalition.
The coalition, in a letter to members sent after the AP report came out, said conflicts weren’t disclosed to the board "because of a weakness in our corporate governance procedures." It said the failure was not because of "inaction on Bob’s part," referring to Barchiesi.
The coalition said that is hiring an independent firm to review its corporate government policies.
In its letter, the board said that as a result of members’ concerns, it was suspending a new class of membership under which Alibaba had recently joined. The move would affect two other companies that signed up under the new rules.
Jennifer Kuperman, Alibaba’s head of international corporate affairs, said companies like Alibaba were important for solving the problem of counterfeiting.
"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," she said.
At issue is the independence of a small but influential coalition that lobbies U.S. officials and testifies before Congress.
Alibaba’s membership could help shape the global fight against counterfeits. Fakes damage companies’ bottom lines, can harm consumers who unknowingly buy such products, and feed a vast underground money-laundering industry that supports criminal syndicates.
In recent weeks Gucci America, Michael Kors and Tiffany have quit the Washington D.C.-based coalition, which has more than 250 members.
The AP found several ties between the group’s president and Alibaba:
—Barchiesi has owned Alibaba stock since its 2014 listing in New York. The IACC said in a statement that the holdings represent "a small percentage of his investment portfolio."
—Matthew Bassiur, who took over as vice president of global intellectual property enforcement at Alibaba in January, hired Barchiesi’s son, Robert Barchiesi II, to work at Apple back in 2011. Alibaba said that hire was made on merit. Apple declined to comment.
—Bassiur is a founding board member of the ICE Foundation, which supports U.S. Immigration and Customs Enforcement employees. Since 2013, the foundation has been run by Barchiesi’s other son, James Barchiesi. That same year, the foundation’s board voted to award a contract for "fiscal and operational management" to a private company, also run by James Barchiesi. The foundation has received grants of $10,000 from the anti-counterfeiting coalition every year since 2012, tax filings show.
Kuperman, of Alibaba, said Bassiur’s expertise would help the company "further instill trust in our marketplaces."
"We are highly confident in his abilities and proud to have him at Alibaba in this critical global role," she said.
Robert Barchiesi had also come under fire for his stewardship of the coalition and allegations of conflicts of interest on the move to include Alibaba.