Hong Kong \u2013 For decades, Ms Kelly Zong had been known as the only child of her late billionaire father, the founder of China\u2019s beverage empire Hangzhou Wahaha Group. <\/p>\n
His effort to groom her as a successor was hailed as a model for Chinese entrepreneurs during the one-child policy era. <\/p>\n
But Ms Zong is now grappling with two overlapping legal challenges stemming from unresolved matters left behind by her father \u2013 cases that could set a legal precedent for wealth succession in China and cast a shadow over the reputation of mainland China\u2019s biggest soft-drinks producer.\u00a0<\/p>\n
In a Hong Kong court in July, Ms Zong was asked to help set up three trusts worth US$2.1 billion (S$2.7 billion) for people who identify as her \u201chalf brothers and sister\u201d following what they say were her father\u2019s directives. <\/p>\n
The case has raised eyebrows and lit up on Chinese social media.\u00a0<\/p>\n
Her delay in setting up trusts has prompted the three half-siblings \u2013 Jacky, Jessie and Jerry Zong\u00a0\u2013 to also file a lawsuit in Hangzhou with similar demands.\u00a0<\/p>\n
Their lawyer said that Ms Kelly Zong had agreed in February 2024 to follow an instruction from her father to set up the trusts. <\/p>\n
But paperwork for the three trusts remains stalled, with no final agreement in place. <\/p>\n
Ms Kelly Zong\u2019s lawyer argued that the handwritten instructions were not addressed to her, and that it is unclear where the funding to cover a US$300 million (S$384 million) shortfall would come from.\u00a0<\/p>\n
\u201cWe agreed to set up the trusts from the start, but only on the condition that the trust assets would be clearly defined,\u201d the lawyer said.\u00a0<\/p>\n
The Hong Kong High Court will hand down a decision on Aug 1, according to its website.<\/p>\n
Separately, the 43-year-old heiress is being sued by some former Wahaha employees seeking to void a 2018 share buyback, according to people familiar with the case. <\/p>\n
The employees argue that the repurchase price was unfairly low, the people said.<\/p>\n
Wahaha\u2019s labour union said the share repurchase move was approved by staff representatives and was lawful, according to a September statement it posted on social media platform Weibo.\u00a0<\/p>\n
The cases have once again thrust Wahaha\u2019s leadership and its ownership structure into the spotlight \u2013 reminiscent of the corporate power struggle following the death of founder Zong Qinghou. <\/p>\n
The disputes also threaten to derail Ms Kelly Zong\u2019s longstanding efforts to take all or part of Wahaha public, following previous failed attempts.\u00a0<\/p>\n
Wahaha\u2019s affairs are also a government concern, as a Chinese state-owned firm has a 46 per cent stake and the company is a flagship enterprise for Hangzhou, where it is headquartered. <\/p>\n
Ms Zong owns 29.4 per cent, while the group\u2019s staff union holds 24.6 per cent.\u00a0<\/p>\n
\u201cChinese family business founders need to take careful note of the Wahaha case,\u201d said Singapore-based International Institute for Management Development family business professor Marleen Dieleman. \u201cEspecially when founders have smaller stakes, succession can quickly spiral into a battle for control.\u201d<\/p>\n
Since Ms Zong took over as chairwoman in August 2024, some of Wahaha\u2019s existing production facilities have been shut down, leading to layoffs as part of business restructuring, the people said. BLOOMBERG<\/p>\n
Chinese billionaires\/millionairesWills, inheritanceFood and beverage sector<\/p>\n","protected":false},"excerpt":{"rendered":"Hong Kong \u2013 For decades, Ms Kelly Zong had been known as the only child of her late…\n","protected":false},"author":2,"featured_media":281535,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2499,16,15],"class_list":{"0":"post-281534","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114894935688176908","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/281534","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=281534"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/281534\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/281535"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=281534"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=281534"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=281534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}