Kelly Zong, the head of China's leading soft drink company Hangzhou Wahaha Group, is involved in a $2 billion inheritance dispute with three people who allege they are her half-siblings and offspring of her late father, the wealthy Zong Qinghou.
Zong, who is highly respected as a giant in China's beverage sector and the founder of Wahaha,died in February at the age of 79More than a year has passed, and family secrets along with a conflict over inheritance are now capturing public interest.
Kelly, 43, is now in charge of the beverage company and, until recently, was publicly recognized as the sole child of Zong and his wife Shi Youzhen. However, she has recently beensued with two lawsuits filed together by three plaintiffs who allege they are her half-siblingsand are attempting to prevent her from overseeing assets valued at approximately US$2 billion.
 |
| Kelly Zong (Fuli Zong) gives a speech during a forum in Hangzhou, Zhejiang Province, China, on November 24, 2020. Image courtesy of CFOTO/Sipa USA via Reuters |
As per Hong Kong media reports on Tuesday, the three plaintiffs — Jacky, Jessie, and Jerry Zong — initiated a legal action in a Hong Kong court last December, seeking an injunction to stop Kelly from accessing funds from the late Zong’s HSBC account, as reported byHKCD.
The legal action claims that the account functions as a trust fund, wherein Zong had pledged to distribute $700 million to each of the three individuals. They have also initiated a separate lawsuit in a court located in Hangzhou, the capital of Zhejiang province in eastern China, to "safeguard their rights."
The three complainants are reportedly the offspring of Zong and his close associate, Du Jianying, as perSina.
When Kelly was 14 years old and decided to study in the United States, Zong sent Du with her to serve as her guardian and look after her.
Born in 1966 in Hangzhou, she graduated from Zhejiang University in 1984 and began working at Wahaha in 1991. Zong personally conducted her interview and was impressed by both her professional skills and her confident nature.
She started her professional journey at the company as a secretary in the CEO's office and gradually advanced to become one of Zong's most reliable assistants.
Du relocated to the United States along with Kelly in 1996 and is said to have given birth to her eldest son Jacky in Los Angeles that same year, then her daughter Jessie in 2007 and her youngest son Jerry in 2017.
While working there, Du oversaw Wahaha's international activities and often traveled between China and the United States.
 |
| Jane Du (Du Jianying) at an event at Westlake University in September 2020. Image provided by Wahaha Bilingual School Hangzhou |
Following Zong's death, Kelly assumed leadership of the group and closed the production lines at 18 Wahaha branch factories situated in various cities such as Shenyang, Chongqing, and Shenzhen, stating the requirement for "adjustment and optimization."
You owned a 40% share in these factories, which meant the shutdowns significantly reduced your dividend earnings.
After the shutdowns, Wahaha contracted its manufacturing to outside firms, with all agreements processed through a series of companies affiliated with Hongsheng Group, a beverage and packaging services company owned by Kelly.
She also mandated that distributors sign new agreements with Hongsheng, shifting the management of Wahaha’s 1.6 million retail locations, such as grocery stores and supermarkets, from the previous system to the one now overseen by Hongsheng.
Some senior management within the organization was also restructured. The group that had operated under Zong was let go and substituted with Kelly's supporters from Hongsheng. Kelly reportedly stated that the previous staff only obeyed her father and she requires individuals who adhere to her directives.
As claimed by the so-called "illegitimate offspring," the trust fund set up by Zong was meant to be distributed $2.1 billion, yet it only held approximately $1.8 billion as of early 2024, according toBloomberg.
They allege that Kelly withdrew $1.1 million from the account via Wahaha, leading them to initiate a legal action due to fear she might take the remaining funds.
The amount they will get from the trust is contingent on the legitimacy of Zong's will. A Hong Kong court has issued an injunction preventing Kelly from accessing the HSBC account until more documents are provided.
As per the will revealed by Kelly, all of Zong's shares and international assets are hers, with no trust fund involved. She claims that the $1.8 billion in the account was capital belonging to Wahaha for overseas operations, held under her father's name.
Nevertheless, the three plaintiffs claim that the will is legally invalid since it was never notarized. They are requesting the court to invalidate the will and distribute Zong's shares equally among all four children according to inheritance laws, and create a new trust fund with the full $2.1 billion as Zong had assured them.
 |
| Zong Qinghou, who was China's wealthiest individual in 2010 and served as the chairman of the beverage company Wahaha, along with his daughter Kelly Zong, are shown at a dinner in Hangzhou, located in eastern China's Zhejiang province, on January 12, 2012. Image provided by Oriental Image through Reuters. |
Established in 1987, Wahaha, translating to "laughing baby," is owned by three primary shareholder groups. A government-affiliated investment firm from Hangzhou's Shangcheng District owns 46%, the family of Zhong Qinghou holds 29.4%, and an employee representative group possesses the remaining 24.6%.
Haha stated on Monday that the legal cases are not connected to the company's activities. Nevertheless, the continuing conflict is beginning to impact its reputation.
"Wahaha is not merely the nation's leading soft drink brand, but also represents the success of private enterprises," said Eric Han, a senior manager at Shanghai-based advisory firm Suolei, as reported by theSouth China Morning Post.
He mentioned that the conflict has "caught the attention" of Chinese businesspeople and customers.
"Zong [Qinghou] has always been a well-regarded business magnate, but the tales regarding his other children made me question his integrity and plans for succession," said Zhang Mingjun, an entrepreneur in the electrical engineering sector in Shanghai.
Wang Feng, the head of Ye Lang Capital, a financial services company located in Shanghai, stated: "Disputes within families and power struggles in boardrooms can negatively affect employee morale and the company's reputation, especially during a period when"companies are undergoing successionfrom pioneering business owners to their descendants.
إرسال تعليق