President of Walmart China Ed Chan steps down; company says departure is unrelated to Chinese government's food safety case against several Wal-Mart stores

Cindy Allen

BEIJING , October 17, 2011 (Associated Press) – Wal-Mart Stores Inc. said Monday the president of Walmart China is stepping down. A company spokesman said the move was unrelated to a Chinese government food safety case against several Wal-Mart stores.

Ed Chan, president of Walmart China since 2007 and also the unit's chief executive, left for personal reasons, the company said.

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 a company spokesman, Anthony Rose. "Ed decided to step down. He resigned for personal reasons."

The post will be temporarily filled by Scott Price, president of Walmart Asia, the company said. A senior vice president of Walmart China, Clara Wong, also resigned. Rose said that departure also was unrelated to the Chongqing case.

Wal-Mart, based in Bentonville, Arkansas, has said it was cooperating with the Chinese investigation in Chongqing but declined to comment further.

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 next year.

Chan oversaw Walmart 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.

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 both ordered to pay up to 500,000 yuan ($75,900) in fines for overcharging on items in their stores.

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