Recently, the controlling shareholder of Yunnan Shennong Agricultural Industry Group Co., Ltd. announced the dissolution of his marriage, resulting in his ex-wife receiving shares worth over 2.4 billion yuan. As a leading enterprise in China’s pig farming industry, Shennong Group has now come under renewed scrutiny following significant financial losses and the high-profile nature of this divorce.
On November 4, Shennong Group issued a notification regarding the changes in equity holdings of its shareholders owning more than 5%. The announcement stated: “Recently, the company was notified by the controlling shareholder and actual controller, Mr. He Zuxun, that he and Ms. Luo Wanyu have completed the formalities for the dissolution of their marriage and have made arrangements for the division of their property.”
Furthermore, the notice indicated that Mr. He Zuxun would directly hold 261,016,651 shares of Yunnan Shennong Agricultural Industry Group Company, with 30% of those shares—amounting to 78,304,995 shares and corresponding rights including dividends, bonus shares, capital increases, and other changes—belonging solely to Ms. Luo Wanyu.
According to reports from “The Paper,” the market value of these shares is estimated to exceed 2.4 billion yuan as of the closing price on November 3.
The announcement also noted that “Mr. He Zuxun and Ms. Luo Wanyu have signed a cooperation agreement, establishing their roles as acting in concert.” Importantly, this change in equity will not trigger a mandatory takeover offer and does not involve a change in the control of the company.
Shennong Group operates in various sectors such as feed production, pig farming, slaughter processing, and food deep processing. However, it has recently reported substantial losses, with its third-quarter financial results revealing a cumulative net profit loss of 971 million yuan for the first three quarters of 2026, dramatically dropping from a profit of 462 million yuan during the same period last year—representing a year-on-year decline of 310.42%. Additionally, after excluding non-recurring gains and losses, the net profit loss amounted to 951 million yuan, marking a 319.63% decrease from previous figures.
The significant financial losses, combined with the eye-catching nature of the share division due to the divorce, have captured market attention. Investors are now closely monitoring whether this news will lead to fluctuations in the company’s stock price.
As previously reported by “界面新闻” (Jiemian News), instances of shareholders using divorce to split equity have become more common in the A-share market. This tactic allows substantial restricted shares to be divided between spouses, circumventing regulations on the reduction of holdings by individual shareholders. By structuring the divorce this way, individuals can avoid capital gains taxes that would otherwise be incurred through direct share sales, thereby implementing a low-cost, low-risk reallocation of assets.
According to regulations governing the mainland stock market, shareholders holding more than 5% in listed companies face restrictions when reducing their holdings, particularly when certain performance benchmarks are not met. Consequently, some individuals choose to divorce to reduce their holdings below that crucial threshold of 5%, avoiding stringent limits on cashing out. In other cases, when companies are facing operational crises, debt challenges, or potential litigation risks, controlling shareholders may deliberately split significant shares with their partners to protect their wealth by effectively isolating debts.
Nonetheless, there are also situations where marital relationships have soured, leading couples to divorce in a bid for control over the company, often resulting in a fragmentation of ownership and even triggering prolonged battles over control.
The record for the most expensive divorce settlement in the A-share market was previously set by Kangtai Biological. In May 2020, Kangtai’s actual controller, Du Weimin, transferred 161 million shares to Yuan Liping as part of their divorce settlement, a sum that, at the time, was valued at an unprecedented 23.55 billion yuan.
In the Chinese stock market, each instance of an actual controller divorcing to divide assets often raises skepticism among investors, many of whom suspect that these actions may represent “sham divorces” aimed at facilitating share reductions under the guise of personal disputes.