On August 27, Zong Fuli submitted a formal complaint to China’s Supreme People’s Court and Supreme People’s Procuratorate, requesting expedited handling of a shareholder dispute involving the employee shareholding committee’s 24.6% stake in Hangzhou Wahaha Group. She has asked for a lawful and fair resolution to protect the company’s interests and settle the matter equitably.
The dispute stems from events following the death of her father, Zong Qinghou. Several retired and former employees have contested the terms of repurchase agreements they signed in 2018, bringing their objections to court. Wahaha’s legal team said all 2018 buybacks were executed with signed agreements, video records, and verified payments from both the group and the employee shareholding committee. The company maintains the plaintiffs’ claims lack factual and legal basis.
A former Wahaha employee told 36Kr that after Zong assumed control of the company, she required staff to amend their labor contracts under the Hongsheng Group umbrella. This led to a collective lawsuit from some former employees, who objected to both the buyback prices and the contract changes. Public records show the case entered judicial proceedings in September 2024.
According to one former employee, the 2018 buyback was not the first time Wahaha repurchased employee shares, but he described that instance as “forced.”
“In 2018, the company repurchased shares from employee shareholding committee members at RMB 2.1 (USD 0.3) per share after tax. Many long-serving sales staff and regional managers left as a result. While Zong Qinghou was still alive, people didn’t raise the issue publicly due to his authority. But Zong Fuli failed to manage relations with veteran employees. When sales got tough and even base salaries were being clawed back, things reached a breaking point.”
Speaking to 36Kr, Dong Yizhi, a lawyer with Joint-Win Partners in Shanghai, said Wahaha’s partial roots in state-owned enterprise reform make this a sensitive legacy issue:
“Legally speaking, employees in a shareholding committee have the right to assert their claims, but ultimately, the courts must determine the validity of those rights.”
Corporate data platform Aiqicha lists Wahaha Group’s shareholders as Zong Fuli (29.4%), the Shangcheng Investment Holding Group in Hangzhou (46%), and the employee shareholding committee (24.6%).
A Jiemian News report cited Wahaha’s legal team as saying that the group’s grassroots union committee still lists only Zong as its sole representative, and that a business registration change remains incomplete due to ongoing litigation.
In August, the Hong Kong High Court issued an injunction in a separate case involving a family trust dispute between Zong and her three siblings. The ruling barred her from withdrawing or transferring funds from Jian Hao Ventures’ HSBC account in Hong Kong. The restriction will remain until the Hangzhou Intermediate People’s Court and Zhejiang High People’s Court issue final judgments.
Wahaha’s legal counsel emphasized that the case brought by Du Jianying, mother of the three siblings, at the Hangzhou court does not involve Wahaha Group shares. The 29.4% stake previously held directly by Zong Qinghou was fully inherited by Zong Fuli under a notarized will, and that transfer has already been registered.
The outcome of the equity dispute could determine whether Zong ultimately becomes Wahaha Group’s largest shareholder.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xie Yunzi for 36Kr.