WEBVTT - Brisbane boots Beam over ‘phantom scooters’ scheme

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<v Speaker 1>You can listen to the fronts on your smart sneaker

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<v Speaker 1>every morning to hear the latest episode. Just say play

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<v Speaker 1>the news from The Australian.

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<v Speaker 2>From the Australian, here's what's on the front I'm Kristin Amiot.

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<v Speaker 2>It's Monday, September two. Anthony Abernezi's approval ratings have returned

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<v Speaker 2>to their lowest level since he became Prime minister. That's

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<v Speaker 2>according to new data from Newspoll. But the Opposition leader

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<v Speaker 2>Peter Dutton is facing similar skepticism from voters, with few

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<v Speaker 2>convinced the coalition would have a better handle on the

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<v Speaker 2>inflation crisis if it were in government. You can read

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<v Speaker 2>our experts analysis of those new numbers right now at

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<v Speaker 2>The Australian dot com dot au. Queensland's government DNA laboratory

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<v Speaker 2>has kept hundreds of sexual assault victims waiting for forensic

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<v Speaker 2>results for more than a year, and it's because the

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<v Speaker 2>lab is struggling with a backlog of more than forty

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<v Speaker 2>thousand major crime cases embroiled in a DNA disaster exposed

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<v Speaker 2>by The Australian's podcast Shandy Story more than three hundred

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<v Speaker 2>thousand dollars. That's how much Brisbane city Council was allegedly

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<v Speaker 2>robbed off by the scooter sharing company Beam Mobility last year.

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<v Speaker 2>Now the nation's biggest city council is kicking Beam to

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<v Speaker 2>the curb and it could have global ramifications for the.

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<v Speaker 1>Multimillion dollar company.

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<v Speaker 2>That's today's episode Scooters. If you live in a city,

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<v Speaker 2>you've probably been impressed or enraged by fleets of purple

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<v Speaker 2>electric scooters dumped on street corners, zooming down footpaths.

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<v Speaker 1>Love them or hate them, These scooters are his being

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<v Speaker 1>Brisbane and so.

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<v Speaker 3>A lot of people get random and if not, just

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<v Speaker 3>have a little bit.

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<v Speaker 2>In some places like Brisbane and Townsville, they're lined up five,

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<v Speaker 2>six or seven in a row.

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<v Speaker 4>I haven't personally ridden one of these scooters my children have.

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<v Speaker 4>I'm probably not as coordinator as I should be in

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<v Speaker 4>handling something so fast and nimble.

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<v Speaker 2>That's the Australians Queensland Bureau Chief Michael McKenna. He's a

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<v Speaker 2>bit of a novice.

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<v Speaker 4>But there's no doubt that the Beam Mobility scooters are

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<v Speaker 4>very evident. The purple livery is everywhere they share the city.

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<v Speaker 4>At the moment with their rival Lime Scooters, beam Mobility

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<v Speaker 4>has obviously now lost that contract and now it's up

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<v Speaker 4>to the city council to find one of its other

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<v Speaker 4>rivals to provide the other half of that cup of scooters.

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<v Speaker 2>Yep, Beam has been booted out of Brisie and it's

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<v Speaker 2>all because of a bit of creative accounting allegedly led

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<v Speaker 2>by its Yale educated founders.

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<v Speaker 4>So over the past month, the Australian newspaper has been

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<v Speaker 4>investigating be Mobility, which is the largest provider of e

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<v Speaker 4>scooters in Australia. That investigation was triggered by a complaint

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<v Speaker 4>by a whistleblower who later furnished US with reams of

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<v Speaker 4>internal correspondence both on slack and internal emails. The allegations

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<v Speaker 4>that were put to us was that the two founders,

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<v Speaker 4>Alan Jang and deb Yango per day and the number

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<v Speaker 4>of executives had cooked up a project whereby they were

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<v Speaker 4>deliberately exceeding the limit that was given by each of

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<v Speaker 4>the cities as part of the contract for the license

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<v Speaker 4>to put these scooters into those cities.

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<v Speaker 2>When be Mobility was awarded a license to operate in Brisbane,

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<v Speaker 2>it was allowed to have eighteen hundred scooters on the

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<v Speaker 2>ground at any one time. It agreed to pay a

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<v Speaker 2>registration fee of six hundred and fifty dollars per scooter

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<v Speaker 2>per year. US Brisbane City Council would take a cut

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<v Speaker 2>of the fee paid by riders every time they hopped

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<v Speaker 2>on a Beam scooter. That's more or less how it

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<v Speaker 2>operates in thirty six other cities around Australia and New Zealand,

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<v Speaker 2>including Sydney, Perth, Darwin, adelaide Cans, Townsville and Hobart. The

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<v Speaker 2>number of scooters as well as their functionality, is monitored

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<v Speaker 2>by a third party watchdog called ride Report. It partially

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<v Speaker 2>relies on data supplied by Beam and other ride sharing

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<v Speaker 2>companies like Lyme to kip tabs on the number of

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<v Speaker 2>scooters and bikes zooming around our cities. Ride Report then

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<v Speaker 2>sends that data back to its clients, that's the councils

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<v Speaker 2>where Beam has a license to operate. But if a

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<v Speaker 2>scooter status is marked as unknown, Ride Report doesn't count it,

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<v Speaker 2>and that's where things get interesting.

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<v Speaker 4>What we understand is that Beam were deliberately misleading ride

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<v Speaker 4>Report and pretending that the rideable scooters were unavailable or

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<v Speaker 4>unknown for reasons such as low battery or damage, and

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<v Speaker 4>that meant that those scooters that were actually on the

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<v Speaker 4>street didn't appear in the monitoring technology. The consequence of

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<v Speaker 4>that is that one it subverted the safety limits in

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<v Speaker 4>keeping the number of scooters on the streets to a minimum,

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<v Speaker 4>and also it allowed Beam to generate cash from the

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<v Speaker 4>rides from everyday users while not having to pay the

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<v Speaker 4>fees that it was supposed to pay to the Risen

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<v Speaker 4>City Council. In the correspondence that we've seen, Beam executives

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<v Speaker 4>boasted of potentially earning at least one hundred and fifty

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<v Speaker 4>thousand dollars a month from its Australian and New Zealand

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<v Speaker 4>operations through the Running Hot Project.

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<v Speaker 2>A tranch of documents and screenshots shared with Michael and

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<v Speaker 2>Senior reporter Sarah Elks by a whistleblower. So Beam was

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<v Speaker 2>allegedly fudging the numbers in Canberra, Townsville, Auckland and Wellington,

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<v Speaker 2>but Brisbane was the biggest money maker, with an extra

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<v Speaker 2>five hundred phantom.

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<v Speaker 1>Scooters deployed every day since last July.

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<v Speaker 2>It means Brisbane City Council has been robbed of more

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<v Speaker 2>than three hundred thousand dollars and it's not happy about it.

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<v Speaker 4>At the same time that we were given the documents

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<v Speaker 4>by the whistleblower. We also later learned that the whistleblower

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<v Speaker 4>had given similar not all of the documents to city

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<v Speaker 4>councils in Australia and New Zealand. They began to run

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<v Speaker 4>their own investigations and internal audits. The Brisbane City Council

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<v Speaker 4>has contacted me and shown me the findings of their

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<v Speaker 4>preliminary audit. The Brisbane City Council are now seeking some

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<v Speaker 4>of the extra documents that we have to use in

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<v Speaker 4>negotiations to recoup that lost revenues from the company. If

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<v Speaker 4>they don't cooperate with those negotiations or the city councils unsatisfied,

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<v Speaker 4>they've told me that they intend to take legal action.

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<v Speaker 4>They're also on Monday going to send a report to

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<v Speaker 4>the Australian Competition and Consumer Commission and also potentially make

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<v Speaker 4>a referral to the police. One of the more extraordinary

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<v Speaker 4>things that you can see in the documents that we've

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<v Speaker 4>been given by the whistleblower is the amount of people

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<v Speaker 4>that are allegedly involved.

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<v Speaker 3>The slack chat, which was titled war Room, had.

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<v Speaker 4>As many as twenty managers, legal counsel and the founders

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<v Speaker 4>involved in essentially running two sets of books, one set

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<v Speaker 4>of books for the regulators and the city councils that

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<v Speaker 4>they were providing the services, and another set of books

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<v Speaker 4>which were talking about the real amount of scooters that

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<v Speaker 4>were being deployed into these cities and the real amount

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<v Speaker 4>of money that they were making in revenues from users.

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<v Speaker 4>It was quite an extraordinary thing to have so many

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<v Speaker 4>involved in alleged conspiracy, and what usually happens when there's

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<v Speaker 4>so many involved in the conspiracy, it started to leak.

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<v Speaker 2>Beam Mobility's chief executive Alan Jung says there's a perfectly

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<v Speaker 2>innocent explanation for the discrepancy. In a statement to The Australian,

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<v Speaker 2>he said the company had marked certain scooters as unknown,

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<v Speaker 2>then deployed extras to fill the gap left by unwriteable vehicles.

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<v Speaker 2>He acknowledged that approach meant that sometimes they exceeded the

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<v Speaker 2>vehicle allocation stipulated by their license, and he said he

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<v Speaker 2>was deeply apologetic for the mix up, but he rejected

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<v Speaker 2>the suggestion it was a scheme to deprive councils of revenue,

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<v Speaker 2>and said Beam will revise its processes to ensure it

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<v Speaker 2>doesn't happen again.

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<v Speaker 1>That may be too little, too late.

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<v Speaker 4>Last week, the Auckland City Council canceled their contract with

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<v Speaker 4>Beam Mobility because of similar allegations and have referred the

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<v Speaker 4>matter to New Zealand Police for investigation. The Wellington City

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<v Speaker 4>Council has also canceled their contract and there are investigations

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<v Speaker 4>that we know of in Touncil Darwin, Hobart in Australia.

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<v Speaker 3>As well as several other cities.

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<v Speaker 1>It's a bungle that could cost Beam darly.

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<v Speaker 4>We've been contacted by the South Korean government through information

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<v Speaker 4>and we know that Beam already operates in about sixty

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<v Speaker 4>cities globally and their market share has been increasing, really

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<v Speaker 4>booming out of site in Turkey, Japan, Indonesia, Malaysia, Thailand,

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<v Speaker 4>South Korea and obviously Australia and New Zealand.

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<v Speaker 3>This is a red hot tech company.

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<v Speaker 4>In the past twelve months, it's raised over one hundred

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<v Speaker 4>million US dollars from investors across the world. Its profit

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<v Speaker 4>had jumped thirty six percent in the last calendar year,

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<v Speaker 4>with predictions of expanding into another ten countries in the

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<v Speaker 4>next eighteen months. The reputational damage to this company is significant.

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<v Speaker 4>They operate on the basis of providing services to cities

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<v Speaker 4>and paying fees. And at the moment we've got a

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<v Speaker 4>series of investigations both by counsels and least one police

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<v Speaker 4>service possibly more, which are looking into them misleading regulators

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<v Speaker 4>and the city councils they work for. So the significance

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<v Speaker 4>and the potential for this company in terms of its

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<v Speaker 4>damage is huge.

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<v Speaker 1>Coming up.

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<v Speaker 2>This isn't Alan Jong's first brush with investigators. Subscribers to

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<v Speaker 2>The Australian get first access to these kind of in

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<v Speaker 2>depth investigations. Plus there's breaking news alerts, newsletters and lively

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<v Speaker 2>commentary twenty four to seven. Check us out at the

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<v Speaker 2>Australian dot com dot au and we'll be back after

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<v Speaker 2>this break. B Mobility isn't Alan Jung's first tech venture,

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<v Speaker 2>and now is this his first encounter with government investigators.

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<v Speaker 2>Here's Michael McKenna.

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<v Speaker 3>That's right.

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<v Speaker 4>Alan Jang, one of the two co founders and Yale

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<v Speaker 4>University graduates, was previously a senior manager with Uber, initially

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<v Speaker 4>in twenty fourteen. He helped lead the expansion of Uber

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<v Speaker 4>into China and Malaysia before taking the reins as the

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<v Speaker 4>country manager for Indonesia in twenty seventeen. It emerged that

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<v Speaker 4>Uber was under investigation by the US Department of Justice

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<v Speaker 4>for alleged bribery. That US Department of Justice investigation was

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<v Speaker 4>into alleged payments by Uber employees alleged bribery payments to

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<v Speaker 4>Indonesian police officers. At the time, mister Jiang reportedly was

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<v Speaker 4>suspended and then left the company. The Department of Justice

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<v Speaker 4>investigation was discontinued in twenty twenty.

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<v Speaker 3>Mister Jiang says.

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<v Speaker 4>That he was not the focus of the investigation and

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<v Speaker 4>has provided a letter from his lawyers that says that

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<v Speaker 4>the Department of Justice a request to speak with him

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<v Speaker 4>or obtain any information from him. But there's no doubt

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<v Speaker 4>that when he left in twenty seventeen, Uber, the company

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<v Speaker 4>he led in Indonesia, was under investigation by the US

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<v Speaker 4>Department of Justice for foreign bribery allegations.

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<v Speaker 2>Michael McKenna is the Australian's Queensland Bureau Chief. He collaborated

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<v Speaker 2>on this investigation with senior reporter Sarah Elks. You can

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<v Speaker 2>read their full investigation as well as the latest updates

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<v Speaker 2>right now at the Australian dot Com dot Au