Wahaha(ha!)

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I reported recently on the trials and tribulations of Danone and their Chinese joint-venture “partner” Wahaha (see here). The latest news is that Zong Qing Hong, Wahaha’s chairman (accused by Danone of running competing businesses in breach of agreements) has resigned. According to Reuters, Zong is continuing to fight it out in (the nationalistic) public:

    “In an open letter to Danone Chairman and Chief Executive Franck Riboud, Zong listed a series of complaints, including his low salary and difficulties in cooperating with Danone directors in China.”

Meanwhile IHT reports that …

    Danone filed “a lawsuit in California last week against a group of British Virgin Islands corporations that were registered by Zong’s wife and daughter, who have run some of the mirror companies and who list California as their state of residence.”

IHT obviously knows it sources, as it goes on to quote Steve Dickinson at China Law Blog / Harris & Moure (who have more on the story here):

    “This is why a lot of companies don’t do joint ventures any more…Many of them ended up like this. You have to have supervision. You need to have protections in place.”

The FT also has a good quote, this time from Zong, who said:

    “It is not an exaggeration to say that [Danone Executives] do not know which way the gates of the joint venture companies open”.

It is no wonder that people try to avoid joint ventures these days! But for anyone that does, and who does not want their partner to have the last (wa) ha ha, this case is a reminder of the need for, amongst other things: engagement (at all levels, not just with the gatekeeper “big boss”); management oversight; crisis management; PR support; succession planning; and…a strong constitution.

See news sources:

3 Responses to “Wahaha(ha!)”

  1. The Danone - Wahaha brewhaha | China Briefing Blog Says:

    […] at could affect the long-term health of the partnership. As Jeremy Gordon puts it, “for anyone that does, and who does not want their partner to have the last (wa) […]

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