Beijing Huiyuan Beverage and Food Group Co., Ltd. (Beijing Huiyuan) publicly revealed on August 9 that the major shareholder Zhuji Wensheng Hui Own Capital Investment Co., Ltd. (Wensheng Hui) has made false capital contributions, abused control rights, and potentially harmed shareholder interests. The company urged small shareholders and creditors to protect their rights.
On August 9, Beijing Huiyuan issued an open letter to all shareholders and convertible bond creditors through its official public account in the afternoon.
The open letter stated that the major shareholder Wensheng Hui proposed to hold the third extraordinary general meeting of shareholders of Beijing Huiyuan in 2025 on August 11, with the agenda including using Beijing Huiyuan’s capital surplus to offset losses. Beijing Huiyuan believes that more than half of the current total capital surplus of the company is uncertain. Using the capital surplus to offset losses at this time would force related creditors to passively engage in debt-to-equity conversion, effectively depriving these creditors of their choice.
The open letter also revealed that Wensheng Hui’s actual capital contribution accounts for only 22.8% of Beijing Huiyuan’s registered capital. A portion of the committed investment totaling 850 million yuan had been overdue for more than a year, despite Beijing Huiyuan issuing 11 reminders for payment. Wensheng Hui still controls the company’s management rights. Furthermore, approximately 650 million yuan of the actual investment funds are in a “lying down” state and have not been put into Beijing Huiyuan’s production and operation activities, therefore should not be entitled to 60% of the shareholders’ rights.
In the open letter, Beijing Huiyuan stated that the company has filed a lawsuit against Wensheng Hui and Shanghai Wensheng Asset Management Co., Ltd., which has been accepted by the court, and urged shareholders and creditors to take legal action to protect their rights.
This open letter has brought to light the capital contradictions behind Beijing Huiyuan.
According to mainland media reports, in June 2022, the Beijing First Intermediate People’s Court approved Beijing Huiyuan’s restructuring plan. Wensheng Assets, as a restructuring investor, planned to inject 1.6 billion yuan and became the controlling shareholder of Huiyuan, with Wensheng Hui as the holding platform established by Wensheng Assets for restructuring Beijing Huiyuan.
However, three years have passed, and Wensheng Assets’ restructuring plan for Beijing Huiyuan has not been fully implemented.
According to a report by “First Financial” on August 10, under Beijing Huiyuan’s restructuring plan, Wensheng Assets was supposed to inject 1.6 billion yuan into Beijing Huiyuan over three years, divided into 750 million yuan, 380 million yuan, and 470 million yuan. Although the first installment of 750 million yuan has been provided, there is a dispute between the two parties regarding the proportion of funds to be included in the registered capital or the capital surplus. According to an announcement by the Zhongguo (Tianjin) Water Co., Ltd., which had planned to participate in Beijing Huiyuan’s restructuring, as of December 31, 2024, the subsequent two installments totaling 850 million yuan from Wensheng Assets had not been received, and these investments remain overdue and unrealized.
Of the 750 million yuan that has been provided, apart from a small amount used by the manager for bankruptcy fees and minor debts, the remaining 647 million yuan funds are currently held in Beijing Huiyuan’s account but are fully controlled by Wensheng Hui and have not been invested in Beijing Huiyuan’s production and operation activities, nor have they made any contribution to Beijing Huiyuan’s existing profits.
A report by Caixin on August 10 showed that, according to three announcements made by Zhongguo Water between December 2022 and July 2023, the company had paid a total of 930 million yuan to Wensheng Hui, exceeding the 750 million yuan provided by Wensheng Hui to Beijing Huiyuan. This indicates that Wensheng Hui almost gained control of Beijing Huiyuan without spending a cent.
Beijing Huiyuan Beverage and Food Group Co., Ltd. was established on June 28, 2001, with its flagship brand Huiyuan Juice being known as the “national juice”.