The really remarkable thing about the fraud at Alibaba, which caused its shares to plunge last week, is the company’s response to it. No one should be remotely surprised that China’s leading online bazaar for small businesses attracted a few scumbags at the fringes. It is not surprising, either, that a small minority of the company’s staff assisted their activities, intentionally or otherwise, in order to hit their own sales targets. Rather, the big sell-off of the HK$77bn (US$10bn) company was caused by its decision to eject its chief executive and chief operating officer.

For investors, that implies strategic upheaval, strained relations with partners at various tiers of the business, and opportunistic moves by competitors – all of which will probably happen. Nonetheless, it is probably the right thing to have done. Officially, Alibaba sells subscriptions to erect virtual storefronts to sell all manner of gadgets and widgets. But much like Ebay, which performs a similar function for consumers, what it really sells is trust. The 2,326 fraudsters uncovered by the company’s investigation were “Gold Suppliers”, which means they had paid the highest annual membership fee, now Rmb29,800 a year ($4,530). For the sake of Alibaba.com’s growth prospects, it is vital that the remaining 136,000 are prepared to keep doing business with each other.

Alibaba group founder and chairman Jack Ma did not have to kick out management. Strictly speaking, he did not even have to disclose the outcome of the formal investigation: the sum of claims so far, amounting to less than 1 per cent of last year’s net income, is well covered by an existing internal fund. And even after last week’s fall, Alibaba’s earnings are valued more highly than 99 per cent of Hong Kong stocks. This refreshing mea culpa might just keep them there, or thereabouts.