Two Wal-Mart China Executives Resign Posts

Anthony Rose, a company spokesman in Hong Kong, said the timing was a coincidence. Both left for personal reasons, he said, declining to elaborate.

Ed Chan, the chief executive and president of Wal-Mart China, and Clara Wong, the senior vice president for personnel at Wal-Mart China, have stepped down. Scott Price, the chief and president of Wal-Mart Asia, will temporarily assume Mr. Chan’s duties in addition to his own, while the company will name a replacement for Ms. Wong in coming days, Mr. Rose said.

In addition to the closings, the municipal government of Chongqing ordered Wal-Mart on Oct. 10 to pay $420,000. The penalties were in response to what the city government described as the mislabeling of pork as organic.

Wal-Mart issued an apology then for inconveniencing its customers because of the closing of stores. The company also said it was working with local officials to improve its operations in Chongqing, which employ 3,000 of the company’s nearly 100,000 employees in China.

The penalty for mislabeling pork was the latest of 21 punishments for Wal-Mart in Chongqing since 2006. The unusual series of penalties, in a country where enforcement of food labeling and handling laws is often weak, has prompted a debate on the Internet in China and among foreign executives over why Wal-Mart has so many troubles.

Chongqing has a reputation for being fiercely nationalistic, but also quick to crack down on organized crime and other illegal activity. So the debate has revolved around whether Wal-Mart has had consistently bad management in Chongqing or whether it is a victim of either populist nationalism or of local retailers allied with officials who dislike competition from a multinational.

Article source: http://www.nytimes.com/2011/10/17/business/two-wal-mart-china-executives-resign-posts.html?partner=rss&emc=rss