Alibaba executive detained over Tencent graft

Patrick Liu Chunning, president of the digital entertainment business of Alibaba Group, speaks at a launch ceremony for Alibaba's Yulebao (Yule Bao) service in Shanghai, March 26, 2014. [Photo / IC]

"As a veteran in China's Internet sector, Liu is equipped with abundant resources. His detention is a loss to Alibaba and will definitely tarnish its brand to some extent," Huang said.

"But he doesn't play a very important part in guiding Alibaba's entertainment strategy since most of the company's important movie-related assets has been injected into Alibaba Pictures, an entity in which he has limited say," Huang said.

In April, Alibaba merged its online film-ticketing business Taobao Ticket and movie financing business Yulebao with Alibaba Pictures to couple its strength in e-commerce and its massive user base with the filmmaking affiliate's production function.

The scandal is not the first time that Chinese Internet giants conducted internal probes to tackle wrongdoings in their companies. In May, search engine Baidu dismissed eight employees after its anti-corruption investigation found four of its departmental directors and four sales staff from district branches took bribes.

Ma Si contributed to this story.