Legal Dispute Over Inherited Wealth
Kelly Zong, the heiress of China’s beverage giant Hangzhou Wahaha Group, is facing a legal challenge from three individuals who claim to be her half-siblings. These plaintiffs are contesting her control over an estimated US$2 billion in inherited assets. The case centers around an HSBC bank account that holds significant wealth, which the plaintiffs want to prevent Kelly from managing.
The lawsuit, currently under review in a Hangzhou court, involves Jacky, Jessie, and Jerry Zong, who assert their right to trusts valued at $700 million each. They argue that these trusts were promised by their late father, Zong Qinghou, the founder of the beverage empire. According to the plaintiffs, Qinghou directed his subordinates to set up the trusts at HSBC in Hong Kong and later instructed assistants to convert yuan into U.S. dollars when necessary.
The plaintiffs are demanding that Kelly honor her father’s will, pay millions in interest on their assets, and compensate them for losses incurred during the transfer of funds. Their lawyer has requested an injunction to stop Kelly from disposing of or reducing the value of the assets in the HSBC account, which held approximately $1.8 billion as of early 2024.
Kelly’s legal team has contested the claims, stating that she does not accept the evidence presented and that Qinghou’s instructions were never communicated to her. They also claim she is unaware of the source for converting the yuan. A judge is expected to deliver a decision in about two months.
Zong Qinghou, once considered China’s richest man, founded Wahaha in 1987. The company started with a milky nutrition drink and expanded to include bottled water, tea, and fruit juices across the country. The Zong family’s fortune is estimated at least $3.3 billion, according to the Bloomberg Billionaires Index.
Kelly, now 43, has been navigating a challenging business environment in China, where the economy is experiencing a slowdown. Wahaha faces increasing competition from rivals such as Nongfu Spring Co. and emerging bubble-tea and coffee chains. Despite these challenges, Kelly has remained a key figure in the company.
She has spent two decades at Wahaha and was appointed vice chair and general manager in December 2021. A graduate of Pepperdine University in the U.S., Kelly has focused on developing marketing strategies aimed at younger consumers. This includes selecting a new brand ambassador, securing TV product placements, and hiring influencers to boost brand visibility.
In addition to her role at Wahaha, Kelly has launched her own line of tea drinks called KellyOne. This brand operates under the Hongsheng Group, a separate beverage and packaging-service business that she has led since 2007. Her efforts reflect a broader strategy to diversify and expand her influence within the beverage industry.
As the legal battle continues, the outcome could have significant implications for the future of the Zong family’s wealth and the leadership of Wahaha. The case highlights the complexities of inheritance disputes, especially in high-profile families with substantial assets. It also underscores the challenges faced by young leaders in maintaining control and growth in a competitive market.
