| Danone dispute heats up as JV chairman resigns |
SHANGHAI, June 8 -- FRENCH dairy and beverage maker Groupe Danone SA said yesterday that the chairman of its troubled Wahaha joint venture 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. The company has not disclosed the amount of compensation it is seeking for "loss and damages."
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, in violation of its joint venture agreements.
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 by 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 companies," he said.
The feud between Danone and Wahaha surfaced several months ago, when the senior Zong publicly rejected a plan by Danone to buy out some of Wahaha's assets, accusing the French company of attempting a hostile takeover.
In his letter, Zong accused Danone of resorting to personal attacks when its buy-out attempt failed.
"They seriously violated by human rights and privacy by using illegal means to track me and my company," Zong said, accusing Danone of hiring private detectives to keep him under round-the-clock surveillance.
Danone earlier filed for arbitration in Stockholm to help resolve the dispute.
"See you in Stockholm," Zong wrote in his letter.
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