AsianFin -- A court in southwestern China on Wednesday heard a lawsuit that pitted three members of the billionaire Zong family, known for building the Wahaha beverage empire, alongside the conglomerate’s venture-capital arm and other investment firms, against a company’s creditors.
According to the trial schedule of the Xiangyun County People’s Court in southwest China’s Yunnan province, the hearing was set for August 13. Defendants include Wahaha CEO Zong Fuli, the daughter of late Wahaha founder Zong Qinghou; her mother, Shi Youzhen; and her uncle, Zong Zehou, as well as Zhejiang Wahaha Venture Capital Co. and several other investment entities. The plaintiff is Zhejiang Yafeng Food Co., which filed the case under a corporate-shareholder liability provision for damaging creditor interests.
Public filings show Yafeng Food was established in late 2018 in Hangzhou, the capital of southeastern China’s Zhejiang province, and engages in food technology development, sales, and general merchandise retailing. In 2022, it became an executive member of the Zhejiang Small and Medium Enterprises Association. The specific details of the dispute remain undisclosed.
The case has drawn attention because of the prominence of Wahaha Venture Capital, a private-equity and startup-investment platform under the beverage group. Registered in 2010 and officially listed with China’s Asset Management Association in 2021, the firm is 90% owned by Hangzhou Wahaha Hongzhen Investment Co. and 10% by Shi.
Despite its modest scale—managing less than 500 million yuan ($69 million)—Wahaha Venture Capital has invested as a limited partner in funds managed by Hillhouse Capital, FC Capital, and a fund jointly launched by China Pharma and CICC, among others. It has indirect stakes in artificial-intelligence unicorn Yitu Technology, biotech company Bloomage Bio, and Shenzhen-listed automation firm Yiheda.
Zong Fuli has also built her own investment vehicle, Ningbo Jinhui Investment Management, wholly owned by her and active since 2015. Her portfolio includes partnerships with well-known Chinese private-equity and venture funds.
Her uncle, Zong Zehou, holds stakes in two of the other defendant investment firms—Hangzhou Zongxin and Hangzhou Zongcheng. Once a founding figure in Wahaha’s early days, he spent two decades running businesses in the U.S. before returning to China.
In recent months, Zong Zehou has publicly criticized his niece’s leadership following his brother’s death last year, accusing her of marginalizing family members and orchestrating aggressive media campaigns. People close to the family say Zong Zehou played a pivotal role in Wahaha’s early success, notably in marketing a pollen-based health drink that inspired the company’s iconic children’s nutrition tonic.
The latest lawsuit now places niece and uncle on the same side of the courtroom aisle—as co-defendants—deepening the legal and personal complexities for one of China’s best-known business dynasties.
