Recruiting in China

SHANGHAI, China (AP) -- French dairy and beverage maker Groupe Danone SA said Thursday that the chairman of its troubled joint venture, Wahaha, has resigned.
Danone said in a statement that it accepted Zong Qinghou's resignation and appointed the venture's French vice chairman, Emmanuel Faber, to replace him.

The announcement came just days after Danone filed a lawsuit in Los Angeles over alleged illegal sales in China by companies it said are run by Zong's relatives.

Danone has accused Hangzhou Wahaha, one of China's biggest domestic beverage makers, of illegally selling products identical to those sold by the companies' joint ventures.

Zong lashed back, accusing board members of Paris-based Danone of "insulting and framing" him.

"It was very hard to work with people who do not understand the Chinese market and culture," Zong said in an open letter distributed via e-mail. "They only want to take the profit and benefit instead of taking on risks and carrying out their responsibilities," he said.

"Therefore, I decided to resign from the joint venture," he said.

The feud between Danone and Wahaha surfaced several months ago, when the Zong publicly rejected a plan by Danone to buy out some of Wahaha's assets, accusing the French company of attempting a hostile takeover.

Danone earlier filed for arbitration in Stockholm to help resolve the dispute.

Danone and Wahaha began their joint venture in China in 1996 and the beverage operation has become one of China's largest.

Shares in Danone rose 0.5 percent to 57.36 euros ($77.53) in Paris.