On February 25th this year, the founder of the Chinese beverage giant “Wahaha,” Zong Qinghou, passed away, and control of Wahaha was passed to Zong Qinghou’s daughter, Zong Fuli. Since her father’s death 145 days ago, a resignation letter from Zong Fuli has sparked controversy within the company.
On July 18th, a letter addressed to all employees of Wahaha Group circulated online, in which it was mentioned that “the Hangzhou Shangcheng District government and some shareholders of Wahaha Group have raised questions about the rationality of the management of Wahaha Group since the passing of Chairman Zong Qinghou. Zong Fuli has decided to resign from the positions of Vice Chairman and General Manager of Wahaha Group effective immediately and will no longer be involved in its operations.”
Sources close to Wahaha informed Pengpai News that Zong Fuli’s resignation letter is indeed authentic, but the abrupt nature of the decision caught many high-ranking executives within Wahaha off guard.
“21st Century Economic Report” contacted the relevant personnel at the propaganda department of Hangzhou Shangcheng District, and they stated, “We are still understanding the situation. We will inform you if there are any developments.” According to insiders, on the afternoon of July 18th, relevant personnel from Wahaha held a meeting at the government office in Hangzhou Shangcheng District.
Zong Fuli’s sudden resignation raises questions about whether it was a strategic move, revealing the tensions among Wahaha’s shareholders.
Currently, Wahaha Group has three major shareholders. The largest shareholder is Hangzhou Shangcheng District Business Travel Investment Holding Group Co., Ltd., owning 46% of the shares, with the equity controlled in practice by Hangzhou Shangcheng District State-owned Assets Supervision and Administration Commission. The second largest shareholder is Zong Qinghou personally holding 29.40% of the shares. Additionally, the third largest shareholder is the joint committee of Wahaha Group’s grassroots trade union, holding 24.60% of the shares.
In fact, as early as December 2021, Wahaha Group announced Zong Fuli as the Vice Chairman and General Manager of Wahaha Group, responsible for daily operations.
In the circulated resignation letter, Zong Fuli emphasized the need for “promptly following the procedures stipulated in the articles of association to reappoint a general manager and to ensure the normal operation of Wahaha Group.”
Zong Qinghou, the founder of Wahaha, passed away on February 25th this year, and was succeeded by his daughter Zong Fuli.
While Zong Qinghou was adamant about not taking Wahaha public or seeking financing, Zong Fuli had different ideas. In a previous media interview, she expressed that taking Wahaha public was a very normal step.
She stated, “If you are not a public company, people will have doubts about investing in you. Although we are a well-known brand, others would feel more secure negotiating with a publicly listed company with clear regulatory procedures. We have never been through a capital integration process. In the current market and industry environment, the significant development of any enterprise is through capital operations.”
However, the primary issue faced by Wahaha’s potential IPO is related to equity problems. A Wahaha distributor told Cailian Press, “Zong Fuli’s push for an IPO has affected employee stock ownership and related interests. Equity is the main contradiction.”
Since the beginning of this year, Zong Fuli has seen frequent job changes within companies under Wahaha Group. A search on Tianyancha, a corporate database, shows that from January 2024 to July 18th, Zong Fuli’s job change information amounts to 125 records. In contrast, in 2023, there were only 16 job change records for her.
After May this year, Zong Fuli, who established Hongsheng Beverage Group Limited herself, has invested in establishing 15 companies. Among them, nine were established within the past month, including Tianjin Hongsheng Hengfeng Beverage Co., Xianyang Hongsheng Hengfeng Food Co., and Zhengzhou Hengfeng Beverage Co., with Zong Fuli serving as a director or executive director in these companies.