THE Wahaha Group, China's biggest beverage maker, yesterday launched its most aggressive move against its French partner Groupe Danone seeking one million yuan (US$131,000) compensation, and worsening a dispute which could see the two sides end an 11-year partnership in Hangzhou.
Meeting with more than 300 domestic and foreign reporters as well as representatives from Wahaha's sales team, distributors and employees, the Chinese company founded by Zong Qinghou said it plans to file a lawsuit against three foreign directors appointed by the French dairy giant in their 39 joint ventures for taking a parallel position in other competitive enterprises that breached China's Company Law.
The lawsuit targets three overseas board members including Emmanuel Faber, the current interim chairman of joint ventures formed between Hangzhou-based Wahaha and Danone.
Wahaha would file the suit on behalf of more than 30 small shareholders if no action was taken by the board of directors and the supervisory board within 30 days.
"The three foreign directors' activities violate the non-competition obligations and have harmed the interests of the joint ventures and the Chinese shareholders," said Zong, the founder, at its second press conference since the dispute went public in April.
The lawsuit is part of Wahaha Group's counterclaims after Danone filed arbitration in Stockholm and a lawsuit in Los Angeles over the last two months, seeking 800 million euros (US$1.1billion) and US$100 million in compensation respectively.
Danone accused the Chinese partner of setting up nearly 20 separate firms which produce and sell competitive produces and for using the Wahaha brand, thus breaking their cooperation contacts.
"They are taking advantage of the brand and non-competitive obligation as excuses after they fail to take control of the profitable companies," said Zong.
Zong didn't deny he owns the allegedly illegal companies outside the joint venture agreement but he insisted he did this because of Danone's indifference to investing in the joint venture and to protect the Wahaha brand, which is still owned by the group.
Zong complained that Danone also did not transfer research and development capacity and management expertise to Wahaha under the tie-up.