Turmoil at China Mobile Creates Opportunity for GSR Ventures–UPDATED

Turmoil at the world’s largest mobile provider and one of its partner companies appears to have benefited GSR Ventures, a China-focused venture capital firm.

GSR, which last month closed on a $350 million China fund, will announce on Thursday that Yinan Li has joined the firm as a venture partner focused on wireless and Internet deals. Li is well known in China’s tech community, having once been the chief technology officer for search engine giant Baidu.

Most recently, Li was chief executive of Beijing Wuxian Xunqi Information Technology Co., which runs China Mobile’s 12580 hotline service. But Li abruptly resigned from that post last month along with Chairman Tian Tao.

Chinese business publication Caixin Online reported on July 22 that it had “learnt from various sources that both Tian and Li were instructed by authorities to assist in the investigation of corruption allegations surrounding executives at state-owned China Mobile.”

The corruption scandal has already resulted in one conviction and it appears that more are on the way. The New York Times reported last month that the former vice chairman of China Mobile was sentenced to death for accepting bribes and that “at least seven other executives from China Mobile are under investigation in corruption cases, according to the nation’s state-run news media.”

PeHUB has requested comment from GSR about why Li resigned from Beijing Wuxian and the investigation into alleged corruption at China Mobile. We will update this story with any comment.

UPDATE: In an interview with peHUB.com, GSR Managing Director Sonny Wu said Li “could have gone to any of the top VCs in China,” and that he is “very active in the industry.”

“He just started today,” he said. Wu declined to comment on allegations filing China Mobile.