Recently, the founder of the retail giant in Henan, Fat Donglai, has sparked public attention with discussions about the distribution of 4 billion yuan in assets. Rumors suggest that there was official involvement in a dispute over interests. Subsequently, Fat Donglai was accused of excessive egg colorant levels, leading to an investigation by authorities and sparking suspicions of retaliation and pressure on the company.
It was reported by multiple media outlets in mainland China, including Dahe Daily, that the next day, the Xuchang Market Supervision Administration officially launched an investigation.
Fat Donglai responded on the evening of March 15th, stating that the standard used by a blogger to judge the content of lutein in egg products using feed additives was based on incorrect criteria. He emphasized that there are no specific residue limits set for lutein in the current national standard GB 2749-2015 for fresh egg food safety. The use of feed additives is regulated for feed production and should not be directly applied to the determination of end-product fresh eggs. Additionally, the eggs sold in stores are sourced from legitimate channels with complete documentation.
Fat Donglai stated that if the investigation proves there are issues with the fresh eggs, they will take responsibility. If there are no problems found, Fat Donglai will uphold their rights.
The discussion surrounding “Fat Donglai’s eggs exceeding artificial colorant standards” briefly became a top trending topic, with many online discussions and speculations, with some questioning whether this was a targeted attack or retaliation against Fat Donglai and Yu Donglai for their distribution of assets.
Prior to this recent “exposure,” Fat Donglai had attracted attention for the discussion of distributing 4 billion in profits to employees.
On March 8th, Yu Donglai, the founder of Fat Donglai, announced the distribution standards for the 4 billion yuan in assets: the management team would receive about 50%, while employees would receive the remaining 50%. These assets would become part of the company’s capital stock, with 50% of annual profits allocated as bonuses for the team and the remaining 50% as shareholder profits. Specifically, the management team of 718 people could share assets worth 1.514 billion yuan, with each store manager receiving an average of 20 million yuan. The remaining assets of about 1.811 billion yuan would be distributed among 8913 frontline employees, with a standard of 200,000 yuan per ordinary employee.
This distribution plan sparked heated discussions on the Chinese Internet, accompanied by various doubts. Yu Donglai had to issue two statements in response. On March 11th, he clarified, “This is the reality, please stop speculating.” On the 14th, he further stated, “Regarding the recent 4 billion asset distribution by Fat Donglai, it has actually been the distribution system for Fat Donglai for over twenty years!”
Yu Donglai criticized those who “distorted the facts” and insinuated, emphasizing the principles of freedom and love.
However, there have been many rumors circulating online. The sudden large-scale distribution of assets by Fat Donglai was allegedly due to the Henan authorities misleading Fat Donglai under the pretext of “cooperation” to obtain his assets. The asset distribution by Fat Donglai was seen as a tactic to push back against the government.
Fat Donglai’s headquarters is located in Xuchang City in Henan Province and is one of the financial pillars of the local government.
According to public information, the first Zhengzhou store of Fat Donglai was planned to be located in the underground commercial project of Zhengzhou High-speed East Railway Station Plaza – Latitude Huayue Plaza. The store was originally scheduled to open before the start of the year of 2026 but was later postponed to open during the “May Day” period of 2026. On March 13th, Yu Donglai revealed on social media that the opening of the first Fat Donglai store in Zhengzhou, initially planned for “May Day,” has now been rescheduled to October.
There were online rumors alleging that the top officials of Henan Province and Zhengzhou City personally intervened to help Yu Donglai open his first Zhengzhou branch. Supposedly, there was an agreement for the government to invest in building a commercial plaza and then lease the space to Fat Donglai. However, midway through the project, the authorities suddenly claimed there was “insufficient funding,” forcing Fat Donglai to finance the construction himself, which was interpreted as an attempt to exploit Fat Donglai’s wealth. The authorities’ plan was for Fat Donglai to develop the plaza, establish stores, and then leverage Fat Donglai’s reputation to stimulate surrounding commercial and real estate development.
The informant also claimed that the authorities knew about the 4.1 billion yuan in Fat Donglai’s account, so they proposed that the continued construction of the plaza “required 4 billion,” tailored to deceive Fat Donglai. After realizing the situation, Fat Donglai chose to confront the authorities and distribute the funds to all employees.
There were also leaked “speeches by Yu Donglai” circulating online, where he stated that he had anticipated this outcome twenty years ago and warned other entrepreneurs that “If you don’t share the money, you will have a bad end.”
However, these claims have yet to be verified.
On February 11th, Yu Donglai announced on social media his retirement after the Chinese New Year, followed by taking on a role as a consultant for Fat Donglai. Some internet users interpreted the “4 billion distribution plan” as Yu Donglai’s “will.”
Regarding the event of Yu Donglai’s asset distribution, well-known overseas commentator Li Chengpeng posted on X on March 15: Chinese entrepreneurs, without exception, have intricate relationships with the party-state when they rise to prominence. Some act maliciously, some are forced. Some are benevolent, such as Ren Zhiqiang and Yu Donglai. Ren Zhiqiang, when accused of bribery, courageously faced it head-on. Similarly, Yu Donglai depleting his wealth to resist the coveting of the authorities might not lead to a favorable outcome. Despite his recent statement that he distributed stock rather than cash, and a Zhengzhou mall being constructed.
Li Chengpeng remarked that many top entrepreneurs in China secretly follow Twitter and YouTube, observing the situation. However, they have illusions that they can race against time, please both sides, but currently, they are walking a tightrope, thinking they can safeguard their assets. They are mistaken – no one can outmaneuver the party. Just consider Ma Yun, Yu Minhong, Sun Dawu, Xu Jiayin, Zhang Jindong, Huang Guangyu, and Zhu Shijian… Everything they have ultimately belongs to the party; at best, they’ll kneel before the authorities and become front desk managers. It’s best to leave before it’s too late.
Later that day, Li Chengpeng posted again, saying: Here it comes. On Consumer Rights Day on March 15th, Fat Donglai’s “egg colorants exceeding standards” surged in searches… this year is the year of the Red Horse, as the saying goes: fierce flames smelt gold. Entrepreneurs, take care of yourselves.
A netizen commented: “It’s a miracle that Fat Donglai was established more than twenty years ago in such an environment, and the way he immediately shared money and stocks with partners seemed to reflect his magnanimity. The current atmosphere is quite stifling; I hope Donglai can manage the situation well.” Another added, “It’s impossible for him to escape now. Moreover, Yu Donglai, although insightful, has some fatal flaws: his self-confidence and clean image give off a sense of rigidity, which could mean missing opportunities to leave. He may eventually have to face the fate of Dawu and Zhiqiang.”
This concludes the translation and expansion of the news article about the developments surrounding Fat Donglai and his founder, Yu Donglai, and the controversies they are embroiled in.