On July 28, 2026, the Hangzhou Binjiang District People's Court began hearings for 11 former employees of NetEase (NTES), all charged in a sweeping corruption scandal that first rocked the gaming industry two years ago.
According to court announcements, the defendants include Xiang Lang, former head of the Battle Business Unit and KK Business Unit, along with Jin Yuchen, former head of the Interactive Entertainment Channel Distribution Center, and nine others. They face charges of accepting bribes from non-state employees, offering bribes to non-state employees, and forging company seals. The case stems from a company-wide anti-corruption notice issued by NetEase in November 2024.
This is not a routine internal disciplinary matter — it is a purge personally driven by NetEase founder Ding Lei. The targets are not peripheral figures, but long-serving veterans who have managed some of the company's most successful game titles for over a decade.
A Notice Exposes a Deep-Rooted Corruption Problem
On November 7, 2024, a screenshot detailing an internal anti-corruption investigation at NetEase's gaming division circulated on social media. It alleged that a general manager in the marketing department had been detained, with investigations spanning multiple core business lines, including the channel center and marketing department. Rumored amounts involved reached hundreds of millions of yuan.
NetEase responded swiftly. The next day, an internal memo was issued: the company had investigated two cases of fraud and corruption, nine individuals were subject to criminal coercive measures, and 27 related companies were added to a permanent blacklist.
Xiang Lang, a key figure in the case, has been a prominent figure in NetEase's gaming operations since joining in 2013. He has held senior roles, including general manager of the game marketing department and senior marketing director, overseeing the marketing and launch of major titles such as Fantasy Westward Journey, Identity V, Minecraft, and Onmyoji Arena. He was considered one of Ding Lei's most trusted lieutenants in game marketing.
Jin Yuchen, another defendant, controlled the Interactive Entertainment Channel Distribution Center, which held critical resources for channel distribution. Reports indicate that both Jin and another defendant, Xu Ao, were management trainees trained by Xiang Lang, forming a "key triangle" in NetEase's game marketing operations.
In January 2025, NetEase issued a further update, stating that over the previous six months, five criminal cases and nine serious violations had been uncovered, involving 27 employees, with 58 additional companies added to the blacklist. Former infrastructure general manager Gan Jidong was sentenced to three years in prison for accepting bribes from suppliers, and former audio department head Fu Mingming was sentenced to nine months for inflating voice actor prices to embezzle company assets. According to reports, the total contract value involved in this case is as high as 2 billion yuan, with the actual amount involved estimated between 800 million and 1 billion yuan.
Ding Lei's Power Consolidation
Why did Xiang Lang, a decade-long veteran overseeing products with significant revenue, end up facing criminal charges? The answer lies in the deeper crisis within NetEase's gaming business.
In the third quarter of 2024, NetEase's gaming and related value-added services revenue was 20.1 billion yuan, a 4.2% year-on-year decrease. Daily active users for the core title Eggy Party plummeted from a peak of 17.46 million to 9.39 million, and revenue for Justice was halved. New game releases faltered, with She Diao being reworked after two months and Tianqi Action shutting down after 46 days. While growth engines stalled, internal "factionalism" and power struggles intensified.
The marketing department, which spent billions annually on advertising, became a breeding ground for corruption, with agencies offering kickbacks and rebates. Art outsourcing quotes were inflated, and bidding processes were mere formalities. It was reported that hotel rooms near NetEase's Guangzhou headquarters were often booked for employees to "play cards and negotiate deals."
In August 2023, a routine audit of the Interactive Entertainment division unexpectedly uncovered a billion-yuan corruption case within a project team, triggering the anti-corruption crackdown. Subsequently, Ding Lei personally took control, implementing a strategy described as "three cuts to decentralize power": splitting business units, with core projects reporting directly to him; sidelining the marketing department by shifting its functions to product lines; and bringing in young, external talent for the executive office. A mid-level NetEase employee noted, "Ding Lei's logic is simple: if the old guard can't be trusted, use new people who haven't learned to be corrupt yet." After approval authority was centralized, Ding Lei personally reviewed processes involving tens of thousands of yuan, and supplier costs were reduced by 80%.
Why Purge the Veterans?
Xiang Lang was not a founding member of NetEase, which was established in 1997, but he was one of the most powerful figures in its marketing operations during the critical decade of the company's transition from PC to mobile gaming. He was Ding Lei's right-hand man in game publishing. This is precisely why his criminal case is so symbolic.
The situation is reminiscent of the Three Kingdoms story where Zhuge Liang executed his trusted general Ma Su to maintain military discipline. Ding Lei's approach to Xiang Lang and others is similar. Despite their significant contributions to NetEase, Ding Lei chose not to handle the matter internally. Even though Xiang Lang was a meritorious veteran, he was still handed over to the police for criminal investigation, terminated, and blacklisted permanently.
The industry has described this as Ding Lei "shedding tears while beheading Ma Su": not denying past achievements, but emphasizing that merit cannot excuse wrongdoing, and contributions cannot be a shield against violating the company's rules and interests. Industry compliance experts note that such a move is difficult for private companies. Internal corruption cases are complex to investigate and costly to pursue; often, investigating a 1 million yuan loss requires spending millions in investigative resources. Many companies prefer to settle and silence the issue to avoid public backlash. NetEase's decision to fully hand over the case to the judicial system and publicly disclose its internal notices signals a willingness to absorb the reputational pain and uphold the company's institutional boundaries.
This approach breaks the long-standing unwritten rules of the internet industry, where executive corruption was often handled quietly, with the adage "VP-level executives are immune from criminal prosecution." In its January 2025 follow-up notice, NetEase also disclosed the departure of marketing vice president Wu Xinxin and marketing general manager Zhang Haixing, indicating that the investigation extends far beyond the initially reported individuals.
As growth dividends fade, internal corruption is the biggest drain on profits. Ding Lei's choice is to cut out the rot, even if the cost is short-term talent loss and business disruption. In 2024, at least seven middle-level managers left, and NetEase's stock price fell 6% in a single day after the corruption scandal became public.
Why Big Tech is Taking a Zero-Tolerance Stance on Corruption
NetEase is not alone. Anti-corruption has become a mandatory task for all major tech companies.
In July 2025, Shanghai police reported on the bribery case of former Ele.me CEO Han Kui, who, along with two others, received over 40 million yuan in bribes from suppliers in less than two years. In April 2026, Baidu released its 2025 anti-corruption report, stating that 144 employees were found to have violated laws and regulations, with a Tieba business department employee sentenced to 12 years for bribery—the longest sentence for internal corporate corruption in the internet sector in the past five years. Tencent handled over 100 "high-voltage line" cases in 2024, with more than 20 people referred to the judiciary. ByteDance fired 100 employees and referred 8 to judicial authorities in the second quarter of 2025. Bilibili's former general manager of the game cooperation department, Zhang Min, was arrested for job-related crimes, and Perfect World filed a report with the police.
Why are these companies, which are known for high-quality talent and generous compensation, becoming hotbeds of corruption? Zhao Jun, a professor at the Beijing Normal University College of Criminal Law, explains that as companies grow, management layers increase, and the separation of ownership and management can lead to a disconnect between employee and company interests, creating fertile ground for corruption. A unique feature of large internet companies is "platform soft power"—access to resources like account reinstatement, trending topic recommendations, traffic allocation, qualification approvals, and supplier approvals. These virtual resources, concentrated in the hands of certain employees, have a high potential for immediate monetization.
Lawyer Wu Xindong from Beijing Deheng Law Firm uses the term "small officials, massive corruption" to describe the phenomenon. He notes that the flat management structure of internet companies, with significant power delegated during rapid expansion, creates short decision-making chains that provide opportunities for rent-seeking at the grassroots level. He identifies four areas most prone to corruption: business development, advertising spending, supply chain management, and content review. These areas share characteristics of blurred power boundaries, difficult-to-trace technical operations, and a direct link between revenue and traffic.
Wu believes that combating corruption in private enterprises requires both legal action from public security authorities and the establishment of internal integrity and compliance systems. A white paper from the Beijing Haidian District People's Court in May 2025 showed that between 2020 and 2024, it handled 127 cases of internal corruption in internet companies, involving over 300 million yuan, with more than 70% occurring in major tech firms. An extreme example involved an ordinary operations employee at an e-commerce platform in Hangzhou, who, holding the power to approve supplier entries, received over 92 million yuan in bribes in a single year.
Legal frameworks are also being strengthened. The Criminal Law Amendment (XII), which took effect in March 2024, expanded three crimes, including the illegal operation of similar businesses, from state-owned enterprises to private companies. Zhang Yuanhuang, a professor at Beijing Normal University who advised on the amendment, notes that previously, anti-corruption in private companies was largely a voluntary effort, lacking systemic national-level support. The amendment signals a coordinated push against corruption in both public and non-public sectors.
In 2024, Chinese prosecutors initiated proceedings against over 10,000 individuals for internal corruption in private companies, a 25% increase year-on-year. Major tech companies are also forming alliances. In 2017, 13 companies, including JD.com, Tencent, and Baidu, launched the "Sunshine Integrity Alliance" to share blacklists. Alibaba has an Integrity Compliance Department, Baidu has a Professional Ethics Building Department, JD.com offers 10 million yuan annually to reward whistleblowers, and ByteDance uses big data to automatically identify risks.
No Immunity for Meritorious Contributors
The July 28 court hearing will reveal more details about the case, including the flow of funds, interest transfer chains, and specific collusion practices. For Ding Lei, the cost of this anti-corruption campaign is significant: the core marketing team has been uprooted, and short-term business disruption is inevitable. However, by choosing to "shed tears while beheading Ma Su," Ding Lei has sent a clear signal: the company is willing to bear the short-term pain for long-term institutional health.
Gaming is NetEase's core business, and marketing spending is one of its largest cash outflows. If corruption remains unchecked, even the most successful game titles will be undermined by internal bleeding. From a broader industry perspective, NetEase's anti-corruption case reflects a shift in the governance logic of the internet sector. In the era of rapid expansion, companies prioritized growth. In the current era of limited growth, the focus has shifted to strengthening and ensuring health. Companies are now prioritizing internal controls, compliance, and integrity as foundational elements for survival.
The dilemma of balancing merit against institutional rules is a permanent challenge for all growing companies. No matter how many past contributions an employee has made, if they cross the legal and company red line, they must face punishment. The consensus among major tech companies is clear: zero tolerance for corruption is not a moral choice, but a survival necessity. This is perhaps the most brutal and realistic logic behind the anti-corruption drive in the internet industry: before the institution, there is no "immunity" for meritorious contributors.
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