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Author | Yan Shulou

I thought it was a drama of forcing the emperor to abdicate, but in the end, four sons showed up to fight for the throne.

There are more and more stories about Wahaha’s internal strife, with rumors and truth mixed together. The local government is urgently needed to clear up the mess.

I have sorted out these rumors. Some of them are taken out of context, some are groundless, and some are purely fabricated. Various forces have their own ulterior motives and their purpose is to destroy the national brand Wahaha.

I have previously analyzed this in "If Wahaha Doesn't Have a Zong Family Name". Today I will mainly sort out some rumors. There are roughly five aspects, and each one is an arrow dipped in venom, shot at China's private economy and cultural confidence.

First, Wahaha is a state-owned enterprise, not a private enterprise.

Many people were shocked when they saw the equity structure of Wahaha, saying that Wahaha was originally a state-owned enterprise. Public data shows that Hangzhou Shangcheng District holds 46% of the shares and is the largest shareholder of Wahaha. In other words, Wahaha is controlled by state-owned assets.

Zong Qinghou himself only holds 29.4% of the shares, and the remaining 24.6% is held by employees. This is indeed beyond the cognition of many people. As we all know, Wahaha is a brand founded by Zong Qinghou on a tricycle. How can it become a state-owned enterprise?

Then some people started to say, "No wonder Zong Fuli resigned, it turned out that someone wanted to take advantage of her." In fact, I checked the information and found that Wahaha has state-owned capital, but it cannot be considered a state-owned enterprise. It can only be said to be a mixed-ownership enterprise, which is a model innovation.

Looking at the past history, the government has always promoted Wahaha as a representative of excellent national enterprises. Zong Lao has also won honors such as "Private Meritorious Entrepreneur".

Therefore, I think it is not accurate to blame the Hangzhou State-owned Assets Supervision and Administration Commission. In fact, the state-owned assets should participate in the shareholding but not in the management, in order to achieve the mutual checks and balances between state-owned capital, entrepreneurial capital and employee union shareholding. Zong Fuli's failure to continue is most likely due to the collective rebellion of the old shareholders.

In fact, Zong Qinghou could have easily refused to own Wahaha like the Liu family did. Shangcheng District also prepared to withdraw from Wahaha twice in 2005 and 2023, but Zong was grateful for the endorsement of the school-run enterprise at that time, so he did not use it to concentrate power. This shows Zong's character.

Second, Mr. Zong is an American citizen, and all his family members are Americans.

This is actually a rehash of history. In 1996, in order to expand into the international market, Wahaha strategically introduced Danone, a French company ranked sixth in the world in the food and beverage industry, and obtained a strategic investment of US$45 million.

By introducing capital and technology, Wahaha quickly became the leader in the domestic food and beverage industry. Influenced by this, Zong Qinghou sent Zong Fuli, who was just in the first grade of junior high school, to study at San Marino High School in the United States, and later majored in international business at Pepperdine University.

In order to facilitate his daughter's study in the United States, Zong Qinghou's family all obtained American green cards, and Zong Qinghou himself also obtained an American green card in 1999. His second brother Zong Duanhou and third brother Zong Zehou both obtained American citizenship and are presidents of the largest Chinese Chamber of Commerce in the United States.

To be honest, in the 1990s and the beginning of this century, China and the United States were in a honeymoon period. It was a trend for many entrepreneurs, including the middle class, to get American green cards. It was not surprising that the head of Wahaha, who wanted to enter the international market, got an American identity. Therefore, many people said that the whole family of Zong was American.

In fact, what everyone does not know is that after Zong Fuli graduated from university and returned to China, the Zong family all gave up their American citizenship. The reason given by Zong Lao is that after living in China all his life, he is a real Chinese, so why should he live in the United States? The money earned in China should be spent in China, and he will not transfer assets to do things that are not his own.

So, although Mr. Zong once had a green card, he had never lived in the United States and decisively gave up his American identity. Zong Fuli was also an American citizen, but under the education of her father, she also gave up her green card, returned to China, started from the grassroots workshop, and stepped up to the center of power step by step.

Therefore, Zong Qinghou is different from Pan Shiyi, Zhang Xin, Duan Yongping and others. He is also different from the Australian founder of Baishuishan and the American founder of Nongfu Spring. He has a strong sense of homeland and family and country.

Third, the clan elder has two sons and one daughter, who share the inheritance.

After Zong Fuli's resignation, there were rumors online that "four sons were competing for the throne". In fact, such rumors existed before, but they just resurfaced with this wave of rumors. In fact, Zong Lao never admitted to this matter, let alone acknowledged it.

Rumor has it that Zong Lao had two sons and one daughter with his second wife, Du, which is why he sent his eldest daughter abroad. His 29.4% stake will be divided into four parts, which means that even though Zong Fuli is the eldest princess, she can only inherit one-fourth of the shares.

If she has a good relationship with her two brothers and one sister, it would be fine, and they could unite as a group to face the outside world, but if they hate each other, then she would not be allowed to stir up trouble in Wahaha. Public data shows that Zong Qinghou is still one of the five important members of Wahaha's board of directors.

That is to say, after Zong Lao passed away, his 29.4% equity was not distributed or changed. Although Zong Fuli inherited the throne in name, she did not have a real say, nor did she get her share of equity. That is why there are doubts about the "rationality" of her succession.

We cannot verify this rumor for the time being. But Zong Lao has never publicly admitted that he has another wife. His only official wife is Shi Youzhen, who started the business with him and is also the most important figure in the battle with Danone. Their only child is Zong Fuli.

So no matter what Zong Fuli was like, he trained her as his successor and eventually handed the last baton of power to his daughter. Unfortunately, Zong Fuli acted too hastily and was eager to marry Xiao Fan before her father's body was cold, which led to internal turmoil and tragic elimination.

Due to space and time constraints, I will not elaborate on the other two rumors. One is about Zong Fuli's two twin daughters in the United States, and the other is about Zong Fuli using Hongsheng Group to embezzle state-owned assets. I think both are groundless.

Finally, let's talk about Zong Fuli's uncle, Zong Zehou, the fourth brother of Zong Qinghou. After the resignation storm, Zong Zehou, as the vice chairman of Wahaha, should have stood on the side of his niece to preside over the overall situation, but he unexpectedly stabbed his niece in the back.

He publicly stated that Zong Fuli's resignation was "a good thing." He believed that Zong Fuli's biggest problem was that the successor to Wahaha should not consider how to expand the scale, how to make money, how to make drastic changes to the status quo, how to fire at all costs, and how to show off her talents, but how to make everyone recognize her.

As Zong Qinghou's biological brother and Zong Fuli's biological uncle, it is really shocking that he stabbed his niece in public. Even if Zong Fuli is indeed too impatient and has limited ability, her authority should not be undermined in public. How can Zong Fuli do her job and manage in the future?

Of course, there are also views that this was Zong Zehou making a veiled attack, so he said this: "If all the shares are yours, of course you can do whatever you want. You are a professional manager in a state-owned enterprise." What he meant was that she should keep a low profile.

No matter what, the situation was very unfavorable for Zong Fuli. On the one hand, the old ministers who had been entrusted with the care of the orphan turned against her, and on the other hand, the family forces took advantage of her misfortune. Zong Fuli was lucky not to be able to control Wahaha, and she would be lucky not to die.

In fact, when Wahaha was forcibly acquired by Danone in 2007, Mr. Zong also resigned, but employees strongly protested. Now Zong Fuli's resignation situation is completely different, which makes people sigh.

No matter what, Mr. Zong is a national entrepreneur worthy of our respect. He does not immigrate, does not go public, does not engage in real estate, and does not engage in financial fraud. These characteristics have already surpassed many capitalists.

However, he did not expect that the team he had built personally back then not only failed to help him complete the transfer of power, but also pushed Wahaha into a life-and-death internal struggle and even led it to collapse.

Wahaha is an outstanding representative of China's private enterprises. We hope that the Hangzhou government can step up and take charge of the situation as soon as possible and come up with a plan acceptable to all parties.

In short, the surname Zong is Wahaha’s best trademark. When Wahaha no longer has the surname Zong, it will lose its core market competitiveness.

What we drink is the simple national flavor of the founder of Wahaha, not the flavor of capital, nor the flavor of America.

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Y2023-2053