Local media reports that China's Taxation Department is investigating Alibaba, the parent company of C2C auction website Taobao.com, after seeing an open letter posted online saying that Alibaba Group has been evading taxes.

Lu Weixing, public relations manager of Taobao.com, has denied that they are being investigated by the taxation department and said that it might be the large scale of Taobao.com that has caused the rumor, and the rumor might have been spread by their competitors.

Lu says that it is the due obligation of each citizen and enterprise to pay taxes and Taobao.com will strongly support the country's laws and regulations.

Taobao.com is a Chinese auction website competing against firms like Ebay's Eachnet, which was recently taken over by a Tom Group subsidiary.