According to officials of Wal-Mart Stores Inc. the president of Wal-Mart China is stepping down. A Wal-Mart spokesperson contends the action is not related to a Chinese government food-safety case under investigation against several stores in the country.
Ed Chan, president of Wal-Mart China since 2007 and the unit's chief executive, left for personal reasons, according to the company.
The departure comes after authorities in the city of Chongqing arrested two employees, closed 13 stores for two weeks and fined the company 2.7 million yuan ($421,000) on charges of passing off regular pork as higher-priced organic meat.
"There is no correlation" between Chan's departure and that case, said Wal-Mart spokesperson, Anthony Rose. "Ed decided to step down. He resigned for personal reasons."
The post will be temporarily filled by Scott Price, president of Wal-Mart Asia. A senior vice president of Wal-Mart China, Clara Wong, also resigned. Rose contends that departure was unrelated to the Chongqing case as well.
Wal-Mart, based in Bentonville, Ark., reports that it is cooperating with the Chinese investigation in Chongqing but declined to comment further, the Associated Press reports.
Industry analysts say the penalties seemed unduly harsh and might be politically motivated as Chongqing officials try to position themselves as consumer advocates ahead of national leadership changes beginning in 2012.
Chan oversaw Wal-Mart China's expansion from 70 stores and 30,000 employees to 353 stores and workforce of nearly 100,000, according to the company.
Food safety is a sensitive issue in China, which has been rocked by scandals ranging from deadly infant formula to chemical-laced pork and recycled restaurant oil tainted with potentially deadly molds.
Chongqing's Communist Party secretary, Bo Xilai, has won acclaim for cracking down on gangs, prostitution and other organized crime in the region.
Bo has burnished Chongqing's nationalist credentials by encouraging residents to sing Mao-era propaganda tunes. He is in competition with other provincial party secretaries for a top position in Beijing.
Earlier this year, both Wal-Mart and rival Carrefour were ordered to pay up to 500,000 yuan ($75,900) in fines for overcharging on items in their stores.
Source: Associated Press