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It was only four months from the time Zong Fuli publicly announced her "succession declaration" to the time she was rumored to have resigned. Wahaha is the beverage empire that Zong Qinghou built from scratch, and its business territory has once again attracted attention.

Zong Fuli took over as legal representative of more than 20 companies

On July 18, a resignation letter from Zong Fuli, vice chairman of Wahaha Group, circulated on the Internet. In March this year, Zong Fuli said in a speech that she was both a "veteran" who had been exploring the industry for 20 years and a "newcomer" who had taken over the "baton" of corporate management.

Speaking of Wahaha taken over by Zong Fuli, the most representative enterprise is Hangzhou Wahaha Group Co., Ltd.

Tianyancha data shows that the current legal representative of Hangzhou Wahaha Group Co., Ltd. (hereinafter referred to as "Wahaha Group") is still Zong Qinghou. The major shareholder of Wahaha Group is Hangzhou Shangcheng District Cultural, Commercial and Tourism Investment Holding Group Co., Ltd. (hereinafter referred to as "Shangcheng Cultural, Commercial and Tourism Holding"), which holds 46% of the shares. The actual controller of the company is the Hangzhou Shangcheng District Finance Bureau.

Zong Qinghou holds 29.4% of the shares of Wahaha Group, making him the second largest shareholder, while Wahaha Employee Stock Ownership Association holds the remaining 24.6%. Wahaha Group was founded in 1993, with 385 employees and registered capital of 526 million yuan.

Currently, Wahaha Group has directly invested in 15 companies, of which 12 are in normal operation and 3 are in abnormal operation. It is worth mentioning that Wahaha Group holds less than 49% of the shares of these companies, including Hangzhou Wahaha Food Co., Ltd., Hangzhou Wahaha Beverage Co., Ltd., Hangzhou Wahaha Hongzhen Packaging Co., Ltd., etc.

In addition to the above-mentioned Wahaha Group, Zhejiang Wahaha Industrial Co., Ltd. (hereinafter referred to as "Wahaha Industrial") has also attracted much attention.

Alibaba's auction platform shows that the company's natural person shares have been auctioned nearly 50 times this year, ranging from 5,000 shares to 60,000 shares, with prices ranging from more than 90,000 yuan to several hundred thousand yuan.

Wahaha Industry, formerly known as Hangzhou Wahaha Food City Co., Ltd., was established in 1993 and is also located in Hangzhou, Zhejiang Province. The registered capital of the company is RMB 91.792 million. Wahaha Industry has invested in 8 companies, including Zhejiang Wahaha Drinking Water Co., Ltd. and Hangzhou Wahaha Pharmaceutical and Health Products Co., Ltd.

As for Zong Qinghou himself, Tianyancha shows that he is still associated with 128 companies, while Zong Fuli is associated with 179 companies, and almost all of the above companies are still in existence. Qichacha information shows that Zong Fuli has taken over the legal representative positions of more than 20 companies, including Hangzhou Wahaha E-Commerce Co., Ltd., Zhejiang Qili Investment Co., Ltd., and Hangzhou Hongsheng Marketing Co., Ltd., since this year, but then resigned from the legal representative positions of Guiyang Wahaha Changsheng Beverage Co., Ltd. and Guiyang Wahaha Food Co., Ltd.

Hongsheng Beverage Group

Recently, a letter of complaint has been circulating online from a person claiming to be a former Wahaha employee, reporting that Zong Fuli, president of Hongsheng Group, had embezzled huge amounts of state-owned assets from the Wahaha Group.

The letter stated that Hongsheng Group was a Sino-foreign joint venture 100% controlled by Zong Fuli, and had been a contract manufacturer for Wahaha Group before the death of the old Zong. After the death of the old Zong, Zong Fuli transferred the interests of Wahaha Group, which originally belonged to the state-owned shares, to her own Hongsheng Group to embezzle state-owned assets by means of transferring orders, profits and even assets.

Regarding the report letter, the relevant personnel of Zhejiang Provincial State-owned Assets Supervision and Administration Commission did not confirm its authenticity, and said that even if there was, they could not see the content of the report letter, and asked the reporter to inquire about the petition office of Zhejiang Provincial State-owned Assets Supervision and Administration Commission. As of press time, the petition office has not responded. The relevant personnel of Hangzhou Municipal State-owned Assets Supervision and Administration Commission said that they were not sure whether they had received the report letter, and said: "Even if they had received it, it is not our responsibility. Wahaha should be under the jurisdiction of Shangcheng District State-owned Assets Supervision and Administration Commission." The relevant personnel of Hangzhou Shangcheng District Government said that they were not aware of the matter.

Therefore, it is still impossible to judge the authenticity of this report letter and its contents.

Data from Qichacha shows that Hongsheng Beverage Group Co., Ltd. was established in 2003. The group is headquartered in Hangzhou, China. The legal representative is Zhu Lidan. The major shareholder is Hengfeng Trading Co., Ltd., which holds 98% of the shares. The latter is registered in the British Virgin Islands. Hengfeng Trading Co., Ltd. has invested in 13 companies including Suqian, Guilin, and Changsha Wahaha Hengfeng Beverage Co., Ltd.

The company's homepage shows that Hongsheng Beverage Group's main products include bottled drinking pure water, milk-containing beverages, tea beverages, fruit and vegetable beverages, canned foods, etc. It currently has 20 production bases, more than 40 subsidiaries and more than 100 production lines across the country, and is one of the top 500 private manufacturing enterprises in China in 2020. After returning to China in 2004 after completing her studies majoring in international business, Zong Fuli began to work in Wahaha as a front-line producer. In 2007, Zong Fuli began to take charge of Hongsheng Group.

Hongsheng Beverage Group is not a new face. Its predecessor was Hangzhou Hongsheng Beverage Co., Ltd. and Hangzhou Wahaha Hongsheng Beverage Group Co., Ltd., and it is also one of Wahaha's off-balance sheet companies.

Wahaha's off-balance sheet companies were established after 2000, and were also the product of the joint venture with Danone. Zong Qinghou once said in his autobiography that due to the rapid growth of Wahaha's size, it needed to increase investment and expand production capacity, but was rejected or delayed by Danone's board of directors. Therefore, a series of off-balance sheet companies were established outside the joint venture to meet the production and processing needs.

After Danone, the off-balance sheet companies that sued Wahaha in the California Supreme Court in Los Angeles included Hengfeng Trading Co., Ltd. and Hangzhou Hongsheng Beverage Co., Ltd.

Shen Meng, executive director of Xiangsong Capital, told the First Financial reporter that the similar registration place and corporate structure of Hengfeng Trading Co., Ltd. are mainly used for tax avoidance and capital operation, which is also a common practice. However, the current equity structure of Wahaha has long formed a cognitive misunderstanding, that is, Wahaha Group is a relatively state-owned enterprise, but those entities around Wahaha, especially those that use the Wahaha brand, are subject to state-owned asset-related risks.