Yang Weidong is now under police investigation and has been removed from his position as president of the video site Youku, according to a statement Alibaba (BABA) filed with the US Securities and Exchange Commission on Tuesday.
"Alibaba Group is committed to the highest standards of business conduct," the statement said. "We do not tolerate any form of unethical or unlawful conduct."
CNN wasn't immediately able to reach Yang for comment.
The Alibaba statement didn't provide any details on what Yang, who was arrested Monday, is alleged to have done. An Alibaba spokeswoman declined to comment beyond the company's SEC filing.
Police in Beijing and Hangzhou, the city where Alibaba is based, weren't immediately available for comment Wednesday.
The arrest comes as Alibaba is in the middle of a massive leadership transition. Founder Jack Ma announced in September that he is stepping down from his role as executive chairman next year, handing over the reins to CEO Daniel Zhang.
Immediately after Yang's arrest, Alibaba named Fan Luyuan as the new head of Youku. Fan had already replaced Yang last month as rotating president of the company's digital media and entertainment division, which includes Youku and other businesses.
Alibaba's digital media and entertainment unit posted a loss of 3.8 billion yuan ($554 million) last quarter.
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