By Rahul Jacob in Hong Kong and Jamil Anderlini in Beijing
Walmart?s China chief executive and a senior human resources executive for the country are leaving the company, the latest upheaval to hit the US retailer?s operations in China.
The company on Monday said that Ed Chan, chief executive for China, and Clara Wong, senior vice-president for human resources in China, had resigned ?for personal reasons?.
Walmart said Scott Price, president and chief executive of Walmart Asia, would also serve ?as interim leader? of Walmart China, where the US retailer has 353 stores in 130 cities. A company spokesman declined to give any further detail.
The latest departures at the top of Walmart?s China operations follow the equally abrupt resignations in May of the company?s chief financial officer and chief operating officer in the country. Walmart said those two executives, Roland Lawrence and Rob Cissell, also had resigned for personal reasons.
Monday?s announcement followed the arrests last week of two Walmart junior store managers and the detention of 35 employees by authorities in Chongqing, where Walmart stores were found to be selling ordinary pork labelled as organic. The company said last week it was co-operating with authorities on the investigation and had closed its 13 stores in the south-western Chinese city for a fortnight.
A US executive in Beijing said the measures taken in Chongqing against Walmart might be part of an effort to put pressure on the US in the wake of the bill passed by the US Senate targeting countries with undervalued currencies. In addition to its retail operations, Walmart?s sourcing operations in the country are a major source of exports for the country.
Walmart?s Chongqing operations have run into trouble with local authorities three times this year, and the company has been punished 21 times in the city since 2006.
Paul French, founder of Shanghai-based research company Access Asia, said Walmart might be being targeted because it is a foreign company. Mr French noted that several retailers, Chinese and foreign, had previously been caught selling meat products past their sell-by dates.
The Walmart case has become a cause c?l?bre in the Chinese press. Last week, the 21st Century Business Herald, a respected business journal, wrote that Walmart ?lacked credibility?, adding that ?if it continues to cheat, 21 penalties will not be the end.? Xinhua, the official news agency, said that financial penalties on big multinationals were not effective and called for better Chinese regulations.
Mr French said that where organic products were concerned, part of the problem was that there were in excess of 40 authorities that could certify products as organic.
Walmart reported $7.5bn in revenue last year in China. That is just a small share of its global revenues of $420bn, but the country?s fast-growing retail market is expanding at a rate of about 17 per cent a year.
? The Financial Times Limited 2011