After the Wahaha heritage storm, Zong Fuli spoke for the first time

Currently, according to industrial and commercial registration, Wahaha Group’s equity is divided into three parts: Hangzhou Shangcheng District Wenshang Tourism Investment Holding Group Co., Ltd. holds 46% of the shares; Zong Fuli holds 29.4% of the shares, and Hangzhou Wahaha Group Co., Ltd.’s Grassroots Trade Union Joint Committee (Employee Stock Holdings Association) holds 24.6% of the shares.

According to previous reports, Wahaha employee shareholding will be invisible, which is a major variable in the company’s actual controlling equity. In 2018, under the leadership of Zong Qinghou, Wahaha conducted a large-scale equity repurchase of its employees. Employee shares are repurchased by the employee’s shareholding association at a price of 3 times and converted into “dry shares”, that is, they do not hold shares, but they can continue to enjoy the dividend rights of these shares. Wahaha’s employees and the outside world are not sure whether there are any employees in the employee shareholding association after this equity repurchase, and what is the actual situation.

Zong Fuli’s profile picture

In response to this, Wahaha Group responded to “Finance” for the first time in writing, saying that the repurchase of the Employee Stock Ownership Association occurred in 2018, and no one had raised any objections before Mr. Zong Qinghou’s death. Currently, Ms. Zong Fuli is the only member of the Stock Holdings Association.

Wahaha said that after Zong Qinghou’s death, some retired and resigned employees suddenly raised objections to the repurchase agreement they signed in 2018 in the form of a lawsuit. However, from the perspective of Wahaha Group and the Stock Holdings Association, the share repurchase in 2018 included agreements, videos and transfer vouchers signed by the parties. The facts were clear, and the plaintiff’s litigation request had no factual or legal basis. Due to the existence of these lawsuits, Wahaha’s equity has not yet completed the industrial and commercial change registration.

In addition, Wahaha made it clear that Du Jianying’s claim in the Hangzhou Intermediate People’s Court case did not involve the equity of Wahaha Group. Zong Qinghou’s 29.4% equity directly held by Zong Qinghou was notarized by the will, and it was indeed inherited by Zong Fuli 100%, and the industrial and commercial change registration has been completed.

“The direction will not be changed due to the storm”

Regarding the impact of the continued fermentation of family inheritance disputes, Zong Fuli, who is at the center of a public opinion storm, said: “The direction will not be changed because of the storm.”

According to previous reports by Nanduwan Finance, according to the hearing results of the Wahaha estate dispute case disclosed by the Hong Kong High Court, Zong Fuli is not allowed to withdraw or transfer any assets from the Hong Kong HSBC account of Jian Hao Ventures Limited until the lawsuit is concluded without the court having other orders. At the same time, Zong Fuli needs to disclose the latest balance, asset destination and complete accounts of the HSBC account. If the assets in the household registration are transferred to a third party on or after February 2, 2024, the defendant must also submit relevant information.

This also means that Wahaha’s estate dispute case is still in progress, and the focus is on subsequent litigation cases of the Hangzhou Intermediate People’s Court and the Zhejiang Higher People’s Court. Regarding the impact of the storm, Zong Fuli said: “No matter how noisy the outside world is, companies need to go far by being down-to-earth, not emotional ups and downs. The only way for me is to take steady steps and not be influenced by the voices from the outside world.”

According to previous reports, on August 1, the lawsuit against Zong Jichang, Zong Jieli and Zong Jisheng, the founder of Wahaha, for Zong Qinghou’s eldest daughter Zong Fuli, was held in the Hong Kong High Court.

According to litigation documents disclosed by the Hong Kong High Court, the three plaintiffs are Jacky Zong, Jessie Jiele Zong, and Jerry Jisheng Zong. The first defendant among the defendants is Kelly Fuli Zong, and the second defendant is Jian Hao Ventures Limited.

According to the lawsuit of the Hong Kong High Court, the assets under the name of Jianhao Venture Capital Co., Ltd. in the bank account of Hong Kong and Shanghai HSBC Bank Co., Ltd. (hereinafter referred to as “Hong Kong HSBC”) are trust property enjoyed by the three plaintiffs Zong Jichang, Zong Jieli and Zong Jisheng. The judge ordered the defendant Zong Fuli not to withdraw money or transfer any assets from the relevant accounts. The injunction will continue to be effective until the final ruling of the lawsuit in the Hangzhou Intermediate People’s Court and the Zhejiang Higher People’s Court.

According to the evidence documents provided by the three plaintiffs Zong Jichang, Zong Jieli and Zong Jisheng, in January 2024, Zong Qinghou personally wrote a hand-in-hand instruction to Guo Hong (transliteration, attorney), with the instructions that the above three plaintiffs handled a trust of US$700 million per person at HSBC in Hong Kong and asked the Hong Kong Notary Office to notarize it.

At the same time, the evidence presented by the plaintiff also includes a power of attorney. The content of the power of attorney is the assets of Zong Qinghou entrusted Zong Fuli to hold Jianhao Venture Capital Co., Ltd. on behalf of him, including assets that open an account at HSBC, and assets that open an account at Goldman Sachs, Standard Chartered, UBS, ICBC, and Bank of China. As of May 2024, the account balance was approximately US$1.8 billion.

After Zong Qinghou’s death, Zong Fuli signed a document called “Agreement” with Zong Jichang, Zong Jieli and Zong Jisheng, involving matters after Zong Qinghou’s death. The content includes all arrangements that all parties recognize Zong Qinghou’s notarized will. Zong Jichang, Zong Jieli and Zong Jisheng admit that Zong Fuli, Shi Youzhen, and Wang Shuzhen (the mother of Zong Qinghou) have all the authority to handle the inheritance of Zong Qinghou’s assets. It is recognized that Zong Jichang, Zong Jieli and Zong Jisheng respectively established three US$700 million trusts (a total of US$2.1 billion).

The focus of the conflict between Zong Fuli and Zong Jichang, Zong Jieli and Zong Jisheng is that Zong Fuli arbitrarily transferred US$1.08 million from the above account for factory expenses in Vietnam. The plaintiff requested that the defendant be ordered to pay the plaintiff’s interest income, based on US$2.1 billion. At the same time, the defendant compensated the plaintiff for the loss of trust property transferred by the unauthorized person, which is temporarily calculated to be US$1.085 million. After the trust transition period ends, Party A (Zong Fuli) will no longer participate in any management of the trust, and will be managed by Party B (Zong Jichang, Zong Jieli, Zong Jisheng).

On the one hand, the defendant Zong Fuli’s side did not recognize the effectiveness of the “handwritten instructions”, and “US$700 million per account” was just an ideal goal; on the other hand, Zong Fuli’s side pointed out that according to Zong Qinghou’s last wishes, the above-mentioned trust assets continued to invest in fixed income at Hong Kong HSBC, and only distributed interest income. No one may claim that the principal of the trust property will be distributed to the beneficiaries.

At the same time, Zong Fuli said that she always respected Mr. Zong’s wishes and did not take any action or inaction to prevent the establishment of overseas trusts. The plaintiff was just too hasty.

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