Betrayed in China: One Entrepreneur's Hard Journey East
In April 2008, six months before Wang went missing, Walmart hosted a vendor meeting that, when Kasha recalls it, still chills his blood.
Recession was already creeping in, and at this summit, executives explained how the retailing giant planned to cut its costs and prepare for winter: Over the next several months, current vendors would enter a dogfight for one another's business. "Next year," a Walmart executive had said, gazing across an auditorium full of suppliers, "we may be having this meeting around a table."
It was a perilous opportunity. For Akasha, winning meant $7 million in annual revenue from Walmart, up from $3.5 million. Losing meant no Walmart business at all. Kasha was anxious, but he relished the pressure.
Wang did not. Scaling that rapidly would cost too much, he argued. Besides, he began telling Kasha, he wanted to retire soon. As the U.S. staff worked on its pitch, Wang became difficult, passive-aggressive. He wouldn't send cost data to inform Akasha's bids. The final Walmart presentation relied on guesswork.
Akasha managed to win the business. In September, in what would be the last time he saw Wang before he disappeared, Kasha flew with members of his senior staff to Changzhou to help plan for the massive order. The Americans made a series of recommendations to improve operations: Wang needed to hire more staff, add more assembly tables, and rearrange the table layout so that arriving trucks of material didn't interrupt the workers. And he needed to do it immediately, because the order was huge: From December 2008 to the end of March 2009, the company would need to deliver $2.9 million worth of product, three times more than it had ever delivered in such a time frame.
The meeting seemed to go fine. Wang expressed concern about cash flow--obviously, filling the Walmart order would require him to buy much more inventory. Kasha agreed to pay some money up front, instead of their usual arrangement, in which Akasha paid Wang 30 days after product shipped from China.
In early October, Akasha wired Wang $500,000. To be ready with more, Kasha successfully applied to expand the company's credit line--that was the 4 million renminbi (roughly $500,000) Joe Albrecht, Akasha's CFO, was sitting on, the down payment Amy Yuan had referenced. But Wang had stopped returning phone calls or emails, so Akasha had held off sending it.
As Kasha emailed back and forth with Yuan, he wondered what his partner could be thinking. Much the same way Westerners exchanged ghost stories about Chinese scamsters, he knew Chinese businessmen had their own versions, in which the international customer makes an epic order only to vanish, leaving the exporter in the lurch. There had been some strain in their relationship, particularly in 2007. Perhaps Wang was still feeling paranoid, fearful.
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From: Rex Wang
Sent: July 5, 2007
To: Adam Kasha
Subject: Urgent you need to seeDear Adam,
I am writing to express my strong feeling of anger!!!
We were together these week, I feel completely different from what you told me in Shanghai. I feel you are not sincere to work with me, no real trust, no real communication, no real respect, but just things you want....
Why it happens? Because you earn more business and money, and changed to another kind of person, self proud. Our happy and easy relationship has disappeared...
There had always been things about Wang that Kasha had to explain to others. At restaurants and karaoke rooms, Wang always insisted on ordering for everyone and paying the whole tab. He often drank too much, and when he did, he sometimes withdrew into himself or became quick-tempered--he hated appearing vulnerable. He teased Kasha when he tried to learn Mandarin and shushed him when he tried to contribute in supplier negotiations. As Kasha saw it, the man needed to be in control. But Wang shipped good product, and sales grew and grew. Kasha let him be.
In 2006, however, margins started slipping, and Kasha did what any American businessman would do: He investigated. In early 2007, Kasha brought Paul Wang (no relation to Rex), a Chinese-born accountant he knew in Ann Arbor, to Changzhou to figure out why Rex's costs kept creeping up.
