Cover Story: Succession, Scandal and Bottled Water — the Real Battle at the Heart of Wahaha Court Case

In the summer of 2024, a courtroom dispute surrounding the estate of Zong Qinghou, the late founder of China’s iconic Wahaha beverage brand, ignited a sensational inheritance battle that has rattled the country’s business landscape. The drama began when three individuals, hitherto unknown but claiming to be Zong’s children from a prior relationship, filed a lawsuit in Hong Kong to freeze $1.8 billion in trust-linked assets. This legal action transformed the succession process from a seemingly straightforward handover to Zong’s daughter, Zong Fuli, into a public family feud, threatening her presumed status as the sole heir and puncturing Wahaha’s reputation for family unity and nationalism [para. 1][para. 2][para. 3][para. 4][para. 5].

Zong Fuli, long positioned as the company’s chief successor, faced not only scrutiny over her legitimacy but also organizational chaos at Wahaha. Following Zong Qinghou’s death in February 2024, Fuli asserted her claim with a notarized will, quickly seeking to secure her father’s 29.4% stake and encouraging key staff to join her Hongsheng Beverage Group. However, her actions met resistance from employees, who worried they would lose rights granted by Wahaha’s employee stockholding program if they transitioned to Hongsheng [para. 6][para. 7][para. 8].

Matters came to a head in July, when a leaked resignation letter from Zong Fuli surfaced online, citing questions over her leadership from state-linked shareholders and officials. Though she ultimately rescinded her resignation after private negotiations, public confidence wavered and speculation swelled about potential state intervention and the motives of the newly emerged American heirs [para. 9][para. 10].

By August, Zong Fuli managed to reclaim her grip on the company, being formally named chairperson and implementing significant changes, including salary cuts and office relocations. This upheaval, combined with over 50 lawsuits from employees seeking restoration of their share rights, intensified tensions. The heart of the conflict lay in the transformation of Wahaha’s employee shareholding platform, once a progressive scheme granting workers partial ownership. After 2018, the program was replaced with “dry shares,” entitling staff only to dividends, not equity—a shift that many employees now challenge as unlawful [para. 12][para. 13][para. 14][para. 15][para. 16][para. 17][para. 18][para. 19][para. 20][para. 21].

Amid the inheritance storm, the emergence of Jacky, Jessie, and Jerry Zong—U.S. citizens and alleged children of Zong Qinghou and Du Jianying, a powerful former executive—rekindled rumors about Wahaha’s true succession lineage [para. 22][para. 23][para. 24][para. 25]. Du had been a central figure in Wahaha's early years but gradually relinquished her roles after Zong Fuli joined the business, marking a slow transition of power [para. 26][para. 27][para. 28][para. 29][para. 30].

Behind the scenes, Zong Fuli accelerated the transfer of profits and control from Wahaha into a web of privately held firms she controls, such as Hongsheng Group. Key company assets and revenue streams, especially in bottled water, were restructured to route profits away from Wahaha, resulting in a more than 60% drop in reported revenues from those lines and prompting an official third-party audit [para. 31][para. 32][para. 33][para. 34][para. 35][para. 36][para. 37].

The legal battle in Hong Kong centers on control of an HSBC account with $1.8 billion, allegedly promised in informal instructions by Zong Qinghou to his three children with Du. The account, held in the name of Zong Fuli as director of a British Virgin Islands shell company, has become the focal point of competing inheritance claims. While her lawyers dispute the existence of a formal trust, Hong Kong law recognizes oral trusts, making the court’s upcoming decisions pivotal [para. 38][para. 39][para. 40][para. 41][para. 42][para. 43][para. 44][para. 45][para. 46][para. 47][para. 48].

All told, the saga is both a textbook family feud and a revealing audit of succession, secrecy, and governance in one of China’s best-known private empires. Experts warn the battle could escalate further, threatening Wahaha’s future as the dispute exposes not just rival heirs but also the complex offshore structures that have shielded China’s business dynasties for decades [para. 49][para. 50][para. 51].