SHANGHAI: Dozens of Wahaha employees took to the street yesterday to protest
the alleged takeover bid by Groupe Danone SA of its Chinese partner.
Wahaha employees in
Shanghai hold a banner saying, "We want Zong Qinghou. We oppose Danone"
June 12, 2007. The employees were angry over an alleged takeover bid by
Danone of its Chinese partner. [China Daily]
Wearing yellow shirts and holding the banners, the protesters, who work for
one of the companies' joint ventures, stood in front of a hotel where a
Danone-organized news conference was scheduled, shouting "Oppose Danone" and
"They expelled our boss," one employee said, referring to the recent
resignation of Zong Qinghou, former chairman of the joint ventures and founder
"We have been following chairman Zong for many years. We've learned from
Danone's acquisition of Chinese beverage maker Robust that there is no happy
ending for employees in a hostile takeover," another worker said, adding that
the protests were spontaneous.
The group gathered at about 9 am yesterday and was dispersed by police one
Danone, which holds 51 percent of 39 joint ventures with Wahaha, presented a
much different picture of its five-month dispute with China's largest beverage
maker. The company accuses Zong of illegally producing and selling products
identical to those sold by the companies' joint ventures, in violation of
agreements between the two companies.
Emmanuel Faber, Danone's managing director for Asia and interim head of joint
ventures, pointed out that Zong, walking away on his own volition, has once
again used public opinion to serve his personal interests.
An employee works at a
production line at a factory of Wahaha in Hangzhou,
Zhejiang Province, May 14, 2007. [Newsphoto]
"This mode of interaction is really consistent with Zong's communication and
strategy since the early part of the discussions," he told reporters during the
news conference yesterday in Shanghai.
"Basically, he was trying to leverage media, the public, employees,
distributors and the government to support his themes," Faber added.
Faber hinted that the protests yesterday were orchestrated by Danone's
"You think the group of people that tried to prevent me from attending this
news conference in front of this building has learned by themselves that Danone
has a news conference this morning here?" he said.
"This simply means that there is obstruction being constantly made to the way
that Danone can protect the interests of joint ventures and their shareholders,
including the government of Hangzhou."
He added: "If I cannot freely access this public building, can you imagine if
I'm trying to push open the door of (joint venture) factories just to be told
that I cannot be there?"
Faber said Danone has no intention of taking further legal measures against
the "unauthorized" businesses started by Zong, and it is convening board
meetings with directors newly appointed by Wahaha after Zong's departure.
A channel remains open between Zong and Danone to address the dispute
peacefully, Faber said. He spiked rumors that a third party has been involved in
their search for a solution.
Fuel was added to the fire after the Paris-based company filed a lawsuit last
Monday in US over alleged illegal sales in China by companies run by Zong's wife
Zong resigned shortly after, and in an open letter he said two of the joint
ventures' French board members - including Faber - had "insulted and framed" him
during the 10-year partnership. He also alleges the French company poached
employees from the joint ventures.
Faber fought back yesterday: "If you know Zong, it's hard to believe that he
can be trapped, bullied or framed by whatever European wise guys."
He added that neither he nor other Danone managers ever gave instructions to
hire or seek to hire employees from the joint ventures.
Open letters are circulating online claiming to represent all Wahaha
employees and opposing the alleged hostile takeover. Faber questioned the
letters' authenticity yesterday.
"The content of these letters does not indicate why these employees are
worried," he said. "Their styles look like they are being written by one
The feud between Danone and Wahaha surfaced five months ago, when Zong
publicly rejected a plan by Danone to buy out Wahaha's remaining assets beyond
joint ventures for 4 billion yuan, accusing the French company of attempting a