Chain retailer Wumart Stores Inc yesterday announced the
resignation of its founder and chairman Zhang Wenzhong, but claimed
that its business would be unaffected by his departure.
In a statement to the Hong Kong stock exchange, Wumart said
Zhang quit as chairman on November 12 and is assisting the
authorities with an investigation.
The Hong Kong-based newspaper Standard reported earlier
that Zhang was under investigation over how he obtained the capital
to establish Wumart in 1994.
"This is a personal matter and will not affect our company's
normal operations and future development," said Wu Jianzhong, the
firm's new chairman.
In addition to the election of Wu, an executive director of
Wumart, to his new post, Wang Jianping, a non-executive director,
was elected vice-chairman of the company's board.
Zhang will remain as an executive director of Wumart.
Media reports of the ongoing investigation and Wumart's
cancellation of its share sale last Thursday had raised concerns
over the company's stability and its ability to expand.
It originally planned to sell up to 101.3 million new H shares
at HK$6.6 (85 US cents) each, raising HK$668.7 million (US$89
million) to finance its expansion.
"We will stick to our regional development strategy," Fu Yu, the
company's senior public relations manager, told China Daily.
He said that the company is now focusing on Beijing and Tianjin
municipalities in the north, northwestern China's Ningxia Hui
Autonomous Region and Jiangsu in eastern China, where it has
established itself through organic growth or mergers and
acquisitions.
But it will also look at other expansion opportunities.
"We are pursuing a rapid but stable growth," Fu said. The
company expects to maintain an annual growth rate of 50
percent.
During the first nine months of this year, the retailer, which
operates nearly 600 Wumart supermarkets, hypermarkets and
convenience stores, reported a turnover of 1.46 billion yuan
(US$184.8 million) with a net profit of 55 million yuan (US$7.06
million), up 54.1 percent and 53.2 percent respectively
year-on-year. The company's shares were last traded at HK$6.88
(88.4 US cents) on November 13.
(China Daily November 21, 2006)