BEIJING Wal-Mart said Monday it was replacing the head of its operations in China, the giant retailer's latest setback there after employees were arrested and detained last week in the western city of Chongqing in connection with a labeling scandal.

The company said on its website that Ed Chan, its chief executive in China since 2007, was leaving for personal reasons. Clara Wong, a senior executive for human resources, was also stepping down, the statement said.

Though Wal-Mart did not link the moves to the controversy, it continues to deal with fallout from charges it sold about 140,000 pounds of pork in the past two years that was mislabeled as a more expensive organic variety. The added cost to consumers amounted to about $115,000, according to the city government's website.

News of the violations surfaced last week after local authorities ordered the temporary closure of 13 Wal-Mart locations, arrested two employees and detained 35. The company also was fined $575,000.

The punishment, which some foreign observers considered excessive, was met with acquiescence from Wal-Mart as it apologized and pledged to correct the problems.


Business & Technology | Wal-Mart replacing China execs after scandal | Seattle Times Newspaper (external - login to view)