Legal battle among ‘secret’ family of Wahaha founder exposes China’s wealth succession crisis

In the last few weeks of his life, Chinese soft drinks billionaire Zong Qinghou scrambled to sign wills and set up trusts to ensure his wealth would be distributed among his family according to his wishes.

But Zong had a “secret” family, and the trusts he set up before he died of lung cancer in February last year are now undergoing public scrutiny in a high-profile court case that has major implications for other wealthy individuals in China.

The case has sounded a warning bell for wealthy families across China. “It’s such a vivid example, showing that even a large company like Wahaha could fail to handle its succession well,” said Chen Qin, managing partner with PKF Demei Law Firm.

Wealthy families are keen to learn more about the Zong case, while also seeking legal advice on making their own plans, according to Wang Xu, a senior partner with the Shanghai-based Hui Ye Law Firm.

Ten months after Zong’s death, disputes over the three trusts he established have put his family at the centre of widespread public scrutiny.