Wahaha CEO's bank account frozen in HK

The Star

3 days ago

The Hong Kong High Court has frozen a bank account containing US$1.8bil amid a legal battle over the inheritance of the Zong Qinghou, late founder of China's leading beverage giant Hangzhou Wahaha Group.
The defendant in the case is Zong's daughter and current Wahaha CEO Kelly Zong Fuli, who has been sued by Zong's three other children.
The 42-page written judgment, delivered by Deputy High Court Judge Gary Lam Chin-ching on Friday, rules that Kelly Zong is prohibited from "withdrawing or encumbering" any asset from a Hong Kong Shanghai Banking Corporation (HSBC) account owned by Jian Hao Ventures Limited, a company incorporated under British Virgin Islands law, pending the conclusion of a parallel lawsuit in a Hangzhou court or until further court orders.
She is also required to disclose the latest balance of the HSBC account, the movements of assets inside, and a full account of receipts and disbursements of the HSBC account.
The case has drawn significant public attention, with dozens of spectators, including journalists, law students and members of the public gathering outside the courtroom ahead of the scheduled public hearing. However, the proceeding lasted only a few minutes and was not open to the public, with just one party's representatives present to collect the court's decision.
The plaintiffs — Jacky Zong, Jessie Zong Jieli and Jerry Zong Jisheng — allege that Kelly Zong breached a family agreement by failing to establish offshore trusts worth $2.1 billion for them after their father's death in February last year.
They also claimed that at least $6 million for unknown purposes was transferred out of the HSBC account.
Zong Qinghou was the sole director of Jian Hao Ventures Limited during his lifetime, with Kelly Zong succeeding him after his death. As of May 31, 2024, the company's HSBC Hong Kong account held $1.799 billion, consisting primarily of bonds and other fixed-income assets, along with some cash and term deposits.
The trio therefore filed a lawsuit in the Hong Kong High Court last year seeking a court order banning Kelly Zong from disposing of or transferring assets held in the account.
Wahaha stated on July 14 that the lawsuits do not affect its operations. The company reported a 40 percent surge in revenue last year under Kelly Zong's leadership, reaching 70 billion yuan ($9.7 billion).
Born in 1945, Zong Qinghou founded Wahaha in 1987, a Hangzhou-based beverage company later grown into a commercial empire.
Once the wealthiest individual on the Chinese mainland, Zong was long seen as a symbol of traditional family values. Kelly Zong, previously believed to be his only child, took over Wahaha after his death but briefly resigned five months later due to disagreements with shareholders. She later resumed her role as CEO following negotiations. - China Daily/ANN