Beverages News
- Wahaha sues director of Danone JV
Date: 11-Jul-2007 Sources: (Shenzhen Daily)
CHINA'S largest drinks company, Wahaha Group, said yesterday its partner had filed a lawsuit in a Chinese court against a director of a joint venture with French food group Danone, accusing him of illegally serving on the boards of rival firms.
The suit is the latest legal move in an unusually public battle between a Chinese firm and a foreign partner that has highlighted the risks of investing in the booming market.
Danone filed a lawsuit in California this year accusing Wahaha of breach of contract by using the Wahaha brand on products sold outside their joint ventures.
'Qin Peng has served as a director of Shenyang Wahaha and on the boards of 20 other firms, all joint ventures of Danone that compete against Wahaha, in violation of China's Company Law,'Wahaha said in a statement.
Shenyang Wahaha is 95 percent-owned by Hangzhou Wahaha, while the remainder is controlled by Shenyang Lingdong Industrial Development Co.
Wahaha has also sought arbitration in China, asking to terminate a trademark transfer contract signed between Wahaha Group and a joint venture of Wahaha and Danone in 1996.
The Chinese company said it was asking the court to force Qin to resign from Shenyang Wahaha and return 3 million yuan (US$395,000) in accumulated salary. It was also seeking a further 2 million yuan in damages.
'The three Danone directors have not violated any legal obligations,'Danone said in a statement yesterday, apparently referring to Qin Peng, Francois Caquelin and Danone's Asia managing director Emmanuel Faber.
Last week, Wahaha accused the three directors of hurting Wahaha's interests by taking positions as directors at Wahaha rivals.
Danone said there was no non-compete obligation for directors, but there was such an agreement for Zong Qinghou, who was chairman of the Danone-Wahaha joint ventures.
Zong quit his post as chairman last month, accusing the French company of damaging his reputation.
Wahaha had said earlier that it lost US$10.5 million in one year after Danone took control of Wahaha's largest domestic rival, Robust group.
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