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Business Standard
15 hours ago
- Business
- Business Standard
China heiress Zong's fight with half-siblings sparks succession debate
By Dong Cao and Venus Feng For decades, Kelly Zong had been known as the only child to her late billionaire father, the founder of beverage empire Hangzhou Wahaha Group Co. His effort to groom her as a successor was hailed as a model for Chinese entrepreneurs during the one-child policy era. But Kelly is now grappling with two overlapping legal challenges stemming from unresolved matters left behind by her father — cases that could set a legal precedent for wealth succession in China and cast a shadow over the reputation of one of the country's most iconic beverage empires. In a Hong Kong court this month, Kelly was asked to help set up three trusts worth $2.1 billion for people who identify as her 'half brothers and sister' following what they say were her father's directives. The case has raised eyebrows and lit up on Chinese social media. Separately, the 43-year-old heiress is being sued by some former Wahaha employees seeking to void a 2018 share buyback, according to people familiar with the case, who requested not to be named because it cannot be accessed by the public. The employees argue that the repurchase price was unfairly low, the people said. The lawsuit has been reported by local media including Caixin. Wahaha's labor union said the share repurchase move was approved by staff representatives and was lawful, according to a September statement it posted on social media platform Weibo. The cases have once again thrust Wahaha's leadership and its ownership structure into the spotlight — reminiscent of the corporate power struggle following the death of founder Zong Qinghou. The disputes also threaten to derail Kelly's long-standing efforts to take all or part of Wahaha public, following previous failed attempts. Wahaha's affairs are also a government concern, as a Chinese state-owned firm has a 46 per cent stake and the company is a flagship enterprise for Hangzhou, where it is headquartered. Kelly owns 29.4 per cent, while the group's staff union holds 24.6 per cent, according to Qichacha. 'Chinese family business founders need to take careful note of the Wahaha case,' said Marleen Dieleman, family business professor at IMD based in Singapore. 'Especially when founders have smaller stakes, succession can quickly spiral into a battle for control.' Since Kelly took over as chairwoman in August last year, some of Wahaha's existing production facilities have been shut down, leading to layoffs as part of business restructuring, the people said. Kelly has been accused of trying to transfer a series of Wahaha's trademarks and some production of its water business to external entities, according to a March letter seen by Bloomberg News that was addressed to both state-owned and individual shareholders of the company's water business unit. Wahaha said in a statement in February its trademark transfers were lawful and it didn't harm the company's operation or assets. The move awaited approval from the country's intellectual property watchdog, it added at the time. Representatives for Kelly and Wahaha didn't provide comments on multiple queries for this story. Hong Kong Case The Zong family has a family fortune of at least $3.3 billion, according to the Bloomberg Billionaires Index. The Hong Kong court case offers a rare glimpse into the family feud within the closely held group, which reported around 70 billion yuan ($9.8 billion) in revenue last year, according to local media. The three plaintiffs — Jacky, Jessie and Jerry Zong — filed the lawsuit in December against Kelly and Jian Hao Ventures Ltd., a British Virgin Islands vehicle controlling an HSBC Holdings Plc bank account in Hong Kong. The suit sought to disclose the assets held in the account and to prevent Kelly from moving them. One month before Qinghou passed away in February last year, he gave a 'hand-written instruction' to one of his subordinates, asking the person to 'get ready to go to Hong Kong. Set up trusts at HSBC, $700 million each,' according to statements from the attorney for the plaintiffs in court on July 11. Shortly after, when they found out the account had a balance of around $1.8 billion, the senior Zong said: 'If the USD is not enough, covert yuan,' and told the person to 'set up the two for Jacky and Jessie first,' the plaintiffs' lawyer said at the hearing. The plaintiffs' lawyer said that Kelly had agreed on Feb. 2 last year to follow an instruction from her father to set up the trusts funded with money from Jian Hao, which counted Qinghou as the sole-director. Paperwork for the three trusts remains stalled, with no final agreement in place. Kelly's lawyer argued that the handwritten instructions were not addressed to her, and that it's unclear where the funding to cover a $300 million shortfall would come from. 'We agreed to set up the trusts from the start, but only on the condition that the trust assets would be clearly defined,' Kelly's lawyer said. The Hong Kong High Court will hand down a decision on Aug. 1, according to its website. The delay in setting up trusts has prompted the three half-siblings to also file a lawsuit in Hangzhou with similar demands. 'In business families, conflict can be severe as the stakes are high and conflict is both financial and emotional,' said Dieleman.
Malay Mail
16 hours ago
- Business
- Malay Mail
A late billionaire, his ‘princess', and three half-siblings: Wahaha succession battle unfolds
HONG KONG, July 22 — Kelly Zong, long seen as the carefully groomed heir to China's Wahaha beverage empire, is now at the centre of two high-stakes legal battles that could reshape the future of one of the country's most iconic private companies. For decades, Kelly Zong was known as the only child of the late billionaire Zong Qinghou, founder of Chinese beverage giant Hangzhou Wahaha Group Co, according to a Bloomberg report. Her father's efforts to groom her as his successor were praised as a model for succession during China's one-child policy era. Now, however, the so-called Wahaha 'princess' is facing two overlapping legal battles that may shape China's approach to inheritance law and affect Wahaha's reputation. In one case, three people claiming to be her half-siblings have asked a Hong Kong court to compel her to help establish three trusts worth US$2.1 billion. The case, which is based on what the plaintiffs say were Qinghou's instructions before his death, has triggered widespread attention on Chinese social media. Separately, Kong is being sued by former Wahaha employees who want to void a 2018 share buyback, saying the repurchase price was unfairly low, according to sources familiar with the matter. Wahaha's labour union said the buyback had been approved by staff representatives and complied with legal requirements, in a statement posted on Weibo in September. These disputes have renewed scrutiny of Wahaha's leadership and shareholding structure following Qinghou's death and could hinder Kelly's efforts to publicly list the company. The company is also of interest to the Chinese government, with a state-owned firm holding a 46 percent stake, while Kelly owns 29.4 per cent and the company's union holds 24.6 percent, according to corporate data platform Qichacha. 'Chinese family business founders need to take careful note of the Wahaha case,' said Marleen Dieleman, a professor of family business at IMD in Singapore. In court, the plaintiffs said Qinghou had issued handwritten instructions in January 2023 to set up three US$700 million trusts at HSBC in Hong Kong, saying 'if the USD is not enough, convert yuan.' Zong's lawyer said she had agreed to the trust plan in principle, but added that 'we agreed to set up the trusts from the start, but only on the condition that the trust assets would be clearly defined.'
Business Times
16 hours ago
- Business
- Business Times
China scion's fight with half-siblings sends succession warning
[HONG KONG] For decades, Kelly Zong had been known as the only child to her late billionaire father, the founder of beverage empire Hangzhou Wahaha Group. His effort to groom her as a successor was hailed as a model for Chinese entrepreneurs during the one-child policy era. But Kelly is now grappling with two overlapping legal challenges stemming from unresolved matters left behind by her father, cases that could set a legal precedent for wealth succession in China and cast a shadow over the reputation of one of the country's most iconic beverage empires. In a Hong Kong court this month, Kelly was asked to help set up three trusts worth US$2.1 billion for people who identify as her 'half brothers and sister' following what they say were her father's directives. The case has raised eyebrows and lit up on Chinese social media. Separately, the 43-year-old heiress is being sued by some former Wahaha employees seeking to void a 2018 share buyback, according to sources familiar with the case, who requested not to be named because it cannot be accessed by the public. The employees argue that the repurchase price was unfairly low, the sources said. The lawsuit has been reported by local media, including Caixin. Wahaha's labour union said the share repurchase move was approved by staff representatives and was lawful, according to a September statement it posted on social media platform Weibo. The cases have once again thrust Wahaha's leadership and its ownership structure into the spotlight, reminiscent of the corporate power struggle following the death of founder Zong Qinghou. The disputes also threaten to derail Kelly's long-standing efforts to take all or part of Wahaha public, following previous failed attempts. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Wahaha's affairs are also a government concern, as a Chinese state-owned firm has a 46 per cent stake and the company is a flagship enterprise for Hangzhou, where it is headquartered. Kelly owns 29.4 per cent, while the group's staff union holds 24.6 per cent, according to Qichacha. 'Chinese family business founders need to take careful note of the Wahaha case,' said Marleen Dieleman, family business professor at IMD based in Singapore. 'Especially when founders have smaller stakes, succession can quickly spiral into a battle for control.' Since Kelly took over as chairwoman in August last year, some of Wahaha's existing production facilities have been shut down, leading to layoffs as part of business restructuring, the sources said. Kelly has been accused of trying to transfer a series of Wahaha's trademarks and some production of its water business to external entities, according to a March letter seen by Bloomberg News that was addressed to both state-owned and individual shareholders of the company's water business unit. Wahaha said in a statement in February that its trademark transfers were lawful and it did not harm the company's operation or assets. The move awaited approval from the country's intellectual property watchdog, it added at the time. Representatives for Kelly and Wahaha did not provide comments on multiple queries for this story. Hong Kong case The Zong family has a family fortune of at least US$3.3 billion, according to the Bloomberg Billionaires Index. The Hong Kong court case offers a rare glimpse into the family feud within the closely held group, which reported around 70 billion yuan (S$12.5 billion) in revenue last year, according to local media. The three plaintiffs, Jacky, Jessie and Jerry Zong, filed the lawsuit in December against Kelly and Jian Hao Ventures, a British Virgin Islands vehicle controlling an HSBC Holdings bank account in Hong Kong. The suit sought to disclose the assets held in the account and to prevent Kelly from moving them. One month before Qinghou passed away in February last year, he gave a 'hand-written instruction' to one of his subordinates, asking the source to 'get ready to go to Hong Kong. Set up trusts at HSBC, US$700 million each', according to statements from the attorney for the plaintiffs in court on Jul 11. Shortly after, when they found out the account had a balance of around US$1.8 billion, the senior Zong said: 'If the USD is not enough, covert yuan,' and told the source to 'set up the two for Jacky and Jessie first', the plaintiffs' lawyer said at the hearing. The plaintiffs' lawyer said that Kelly had agreed on Feb 2 last year to follow an instruction from her father to set up the trusts funded with money from Jian Hao, which counted Qinghou as the sole director. Paperwork for the three trusts remains stalled, with no final agreement in place. Kelly's lawyer argued that the handwritten instructions were not addressed to her, and that it's unclear where the funding to cover a US$300 million shortfall would come from. 'We agreed to set up the trusts from the start, but only on the condition that the trust assets would be clearly defined,' Kelly's lawyer said. The Hong Kong High Court will hand down a decision on Aug 1, according to its website. The delay in setting up trusts has prompted the three half-siblings to also file a lawsuit in Hangzhou with similar demands. 'In business families, conflict can be severe as the stakes are high and conflict is both financial and emotional,' said Dieleman. BLOOMBERG
Straits Times
16 hours ago
- Business
- Straits Times
Wahaha heiress' fight over inheritance with half-siblings sends succession warning
Kelly Zong's delay in setting up trusts worth US$2.1 billion for her half-siblings has prompted them to file a lawsuit. Hong Kong – For decades, Kelly Zong had been known as the only child to her late billionaire father, the founder of China's beverage empire Hangzhou Wahaha Group. His effort to groom her as a successor was hailed as a model for Chinese entrepreneurs during the one-child policy era. But Ms Zong is now grappling with two overlapping legal challenges stemming from unresolved matters left behind by her father – cases that could set a legal precedent for wealth succession in China and cast a shadow over the reputation of mainland China's biggest soft-drinks producer. In a Hong Kong court in July, Ms Zong was asked to help set up three trusts worth US$2.1 billion (S$2.7 billion) for people who identify as her 'half brothers and sister' following what they say were her father's directives. The case has raised eyebrows and lit up on Chinese social media. Her delay in setting up trusts has prompted the three half-siblings - Jacky, Jessie and Jerry Zong - to also file a lawsuit in Hangzhou with similar demands. Their lawyer said that Kelly Zong had agreed in February 2024 to follow an instruction from her father to set up the trusts. But paperwork for the three trusts remains stalled, with no final agreement in place. Ms Kelly Zong's lawyer argued that the handwritten instructions were not addressed to her, and that it's unclear where the funding to cover a US$300 million (S$384 million) shortfall would come from. 'We agreed to set up the trusts from the start, but only on the condition that the trust assets would be clearly defined,' the lawyer said. Top stories Swipe. Select. Stay informed. World Trump 'caught off guard' by Israel's strikes in Syria Opinion Singapore's vaping crisis lays bare the drug addiction nightmare for parents Singapore LTA seeks tailored solutions to improve Bukit Panjang LRT's maintenance inspections World US not rushing trade deals ahead of August deadline, will talk with China, Bessent says Multimedia 'It's very sad': She comforts loved ones turned away by inmates Opinion Sumiko at 61: 7 facts about facial skin ageing, and skincare ingredients that actually work Singapore Subsidies and grants for some 20,000 people miscalculated due to processing issue: MOH Opinion With Shatec cutting back operations, what's next for Singapore's hospitality sector? The Hong Kong High Court will hand down a decision on Aug 1, according to its website. The delay in setting up trusts has prompted the three half-siblings to also file a lawsuit in Hangzhou with similar demands. Separately, the 43-year-old heiress is being sued by some former Wahaha employees seeking to void a 2018 share buyback, according to people familiar with the case. The employees argue that the repurchase price was unfairly low, the people said. Wahaha's labour union said the share repurchase move was approved by staff representatives and was lawful, according to a September statement it posted on social media platform Weibo. The cases have once again thrust Wahaha's leadership and its ownership structure into the spotlight – reminiscent of the corporate power struggle following the death of founder Zong Qinghou. The disputes also threaten to derail Ms Kelly Zong's long-standing efforts to take all or part of Wahaha public, following previous failed attempts. Wahaha's affairs are also a government concern, as a Chinese state-owned firm has a 46 per cent stake and the company is a flagship enterprise for Hangzhou, where it is headquartered. Ms Zong owns 29.4 per cent, while the group's staff union holds 24.6 per cent. 'Chinese family business founders need to take careful note of the Wahaha case,' said Marleen Dieleman, family business professor at IMD based in Singapore. 'Especially when founders have smaller stakes, succession can quickly spiral into a battle for control.' Since Ms Zong took over as chairwoman in August 2024, some of Wahaha's existing production facilities have been shut down, leading to layoffs as part of business restructuring, the people said. BLOOMBERG
Sydney Morning Herald
13-07-2025
- Business
- Sydney Morning Herald
‘Princess of Wahaha': China heiress in $3 billion inheritance feud with siblings
A $US2 billion ($3 billion) wealth tussle at one of China's largest beverage empires is unfolding in a Hong Kong courtroom. The battle pits three plaintiffs who say they are half-siblings of Hangzhou Wahaha Group's Kelly Zong in a lawsuit against the heiress of the drinks company. They are seeking an injunction preventing her from dealing with assets held in an HSBC bank account. The three plaintiffs — Jacky, Jessie and Jerry Zong — were identified by their lawyer as Kelly's 'half brothers and sister,' revealing their connection to her for the first time. Known as the 'Princess of Wahaha' in China, Kelly had been until now been publicly regarded as the only child of the late Wahaha beverage tycoon, Zong Qinghou. Loading The plaintiffs' lawyer stated that the three are also pursuing legal action in a Hangzhou court to secure rights to trusts — each valued at $US700 million — which they claim were promised to them by their late father. When Qinghou died at the age of 79 in February last year, Kelly took charge of the privately-held group after spending months settling internal shareholder disputes. The plaintiffs say Qinghou asked his subordinates to help set up trusts for them at HSBC in Hong Kong and later also requested that the assistants convert yuan into US dollars when the funds proved insufficient. They are requesting that Kelly honor their father's will, pay millions in interest on their assets, and compensate them for losses incurred from the transfer of their funds.
