BEIJING — The suicide of a Chinese executive implicated in a massive recall of Mattel toys has intensified the spotlight on China's quality-control problems and the strong role "guanxi," or connections, play in business dealings here.
Cheung Shu-hung, a co-owner of the Lee Der Industrial in southern China, came under severe pressure in August after El Segundo, Calif.-based Mattel voluntarily recalled nearly 1 million plastic preschool toys made by Lee Der and containing paint with excessive levels of lead.
State media reported Monday that Cheung greeted workers over the weekend, chatted with them, then went to the warehouse and hanged himself.
According to the Southern Metropolitan Daily newspaper, Cheung, reportedly in his 50s and unmarried, was sold the defective paint by his best friend.
Officials at the Lee Der factory in Foshan in southern China and its headquarters in Hong Kong could not be reached for comment.
The toys manufactured by Lee Der between April 19 and July 6 and sold in the U.S. under Mattel's Fisher-Price brand included such well-recognized favorites as Big Bird, Elmo and the Dora and Diego characters.
Mattel is set to announce the recall of another toy involving a different Chinese supplier as early as today, according to three people close to the matter who spoke on condition of anonymity because of the sensitivity of the situation.
Details of the latest recall were not immediately available, but one of the three people said the toy is being recalled because its paint may contain excessive amounts of lead.
Mattel's quality problems are the latest in a parade of scandals involving Chinese-made toys, tires, seafood, pet food, medicine, toothpaste, vitamins and food additives, among others. Mattel, the world's largest toy maker, said last week the recall will reduce its second-quarter pretax operating income by $30 million, or 47 percent.