Although both are giants in the food industry, why did Master Kong’s transition of the Chief Executive Officer (CEO) proceed relatively smoothly, whilst Wahaha became embroiled in a cross-border property dispute following the founder’s death? Seemingly, the difference appears to lie with the successors; however, closer examination reveals that what truly determines the outcome of inheritance is whether the successor can systematically address the three key issues—management, power and assets—before the key figure stepping down.
On 1 January 2026, Wei Hongcheng took over as Chief Executive of Master Kong Holding Limited. Meanwhile, following the death of Zong Qinghou, as Zong Fuli assumed control of the business, disputes surrounding approximately US$1.8 billion in Hong Kong bank accounts and three proposed offshore trusts entered the judicial process. These two incidents thus present contrasting scenarios of inheritance.
I. The Management handover of Master Kong: How was handover planning gradually unfolded?
Mr. Wei Hongcheng did not join Master Kong only upon assuming the role of Chief Executive Officer. He had served as a director of KSF Beverage Holding Co., Ltd. since 2015, and then became Chairman of that company and an Executive Director of Tingyi (Cayman Islands) Holding Corp. in 2019, and now he officially takes over Chief Executive Officer in 2026.
This experience illustrates that the management handover must begin before a formal appointment is made. Only when the successor first assumes responsibilities in day-to-day operations and on the board of directors can the company assess their decision-making and collaborative abilities. For family businesses, family ties cannot substitute for practical experience; the foundation for inheritance must still be built through hands-on business operations.
II. The predicament of Wahaha arises from a confluence of issues
Wahaha faces a different situation
Following the passing of Zong Qinghou, Wahaha needed to complete the management handover, whilst disputes over family assets and the proposed offshore trust arose simultaneously. Issues that should have been dealt with separately—corporate inheritance, family interests and asset arrangements— thus arose concurrently within the same timeframe.
According to the Hong Kong court’s published judgement, the case concerns an account with net assets of approximately US$1.8 billion, as well as arrangements to establish an offshore trust for three claimants. The parties are in dispute over the validity of the documents, the obligations involved and the conditions for establishment, whilst, some of the trust deeds and transfer documents have not yet been fully signed. The court’s orders for the preservation of assets and for ancillary disclosure do not constitute a ruling that the trust has been established, nor do they determine the ultimate ownership of the assets.
This dispute illustrates that while the competence of the successor is undoubtedly important, the ability to translate the founder’s wishes regarding their estate into comprehensive documentation, asset arrangements and implementation mechanisms will equally influence the outcome of inheritance.
III. Analysis of the two cases: Management handover and wealth inheritance are not the same process
The Master Kong case illustrates a gradual process of management inheritance, whilst the Wahaha dispute highlights the risks that property arrangements may face at the levels of documentation and implementation. The inheritance of a family business involves at least three areas of preparation:
●Personnel preparation: Does the successor possess practical management experience?
●Preparation of authority: How will the handover of the board of directors, shareholders and major decision-making powers take place?
●Preparation of assets: Who will take over the shareholdings and other assets, and have the relevant legal documents been finalised?
Merely preparing a successor may not necessarily resolve issues concerning shareholdings and family interests; similarly, merely arranging for the transfer of assets cannot ensure the selection of a suitable manager for the enterprise. The three aspects of preparation must each be established in their own right and then work in concert.
IV. From concept to execution: Wealth planning must be implemented through legal and governance processes.
Wealth planning cannot be limited to mere will or a single document; it must involve four key processes: the legal drafting of documents, the transfer of assets in accordance with requirements, the clear definition of the executor’s powers and responsibilities, and alignment with the articles of association, shareholders’ agreements and voting mechanisms.
A trust is merely one such tool; while it can establish rules for asset management and beneficiary rights, it cannot replace the development of successors or corporate governance. The key to determining whether an arrangement is comprehensive lies not in the specific tool employed, but in whether it can continue to be implemented after the founder has stepped down.
V. Before the founder steps down: What inheritance framework should a family business establish?
What entrepreneurs should take away from these two incidents is not which family is more harmonious, but whether their own business can continue to operate after the loss of a key figure:
●If you were unable to sign documents in the future, who would have the authority to manage the business and make decisions?
●If the next generations cannot reach a consensus, what rules would govern the allocation of shareholdings, voting rights and board seats?
●If family relationships or the external environment change, who will continue to execute the established arrangements regarding assets?
These issues cannot be addressed calmly only after an unforeseen event has occurred. The development of successors, the handover of corporate authority, and the implementation of asset arrangements must each be completed while the founder still possesses full decision-making capacity, and these three elements must then be linked together through institutional frameworks.
The true test of business inheritance lies not merely in the ability to select a successor, but rather in ensuring that, when the founder is no longer at the centre of the business, management responsibilities are assumed, the exercise of power is governed by clear rules, and asset arrangements are implemented through established mechanisms. Wealth may be created by one generation, but whether it can be sustained across generations ultimately depends on whether the arrangements are made in a timely and comprehensive manner with effective implementation.
Disclaimer: The content of this article is based on a review of publicly available legal provisions and industry practices, and is intended solely for the purposes of information sharing and academic discussion. The content of this article does not constitute professional advice on legal, tax, investment or trust matters in any jurisdiction. It is recommended that you seek independent professional advice on legal, financial and tax matters before taking any action regarding wealth planning.
