Wumart stock suspension worries market
By Liu Jie (China Daily)Updated: 2006-11-16 09:57 Beijing's largest chain retailer Wumart Stores Inc's stock suspension and sudden replacement of its chairman and co-founder has raised concerns about the company's ability to complete its expansion plans.
The company suspended trading of its shares on the Hong Kong Stock Exchange on Monday, pending the release of price-sensitive information.
The Standard, a Hong Kong-based English-language newspaper, said in a report yesterday that Zhang Wenzhong, chairman of Wumart's board and co-founder, was under government investigation over how he obtained the capital to set up Wumart in 1994.
Zhang is seen by many as a driving force at the company and a key to its future growth.
He is also under investigation for an allegedly improper relationship with a department of the National Developmental Reform Commission, China's economic planning agency, the report said without elaborating.
Wumart Group Branding Manager Fu Yu commented on Sina.com that Wumart's Executive Director Wu Jianzhong, who oversees human resources, had been appointed interim chairman. Fu declined to comment on Zhang's situation.
Calls to Wumart seeking further comment were not answered.
But an unnamed senior researcher at China Chain & Franchise Association
said rumours were not just unverified speculation. The researcher noted that Liu
Zhihua, the vice-mayor of Beijing, was under investigation for suspected bribery
involving real estate projects and that a series of businesses and executives
related to him were involved.
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