Danone threatens Wahaha with another lawsuit

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    SHANGHAI, July 19 (Xinhua) -- French food giant Danone said Thursday it may start another lawsuit against Zong Qinghou, former chairman of Danone-Wahaha's 39 joint ventures.
    Danone said in a statement that its subsidiaries had requested the boards of the joint ventures to file a lawsuit against Zong, claiming he used his post as chairman to set up and operate companies that compete with the joint ventures.
    It said Zong has breached China's corporate law, which prohibits directors being employed by competitor companies. The statement claimed Zong has damaged the interests of the joint ventures and the shareholders.
    Danone said it would start legal procedures if the boards failed to act. Wahaha was not immediately available for comment.
    The move is the latest in the escalating dispute between the Chinese drink group Wahaha and the French giant that began in April.
    Danone, which owns a 51-percent stake in the 39 joint ventures, has accused Wahaha of setting up independent companies and selling products identical to those sold by the joint ventures. Danone had demanded for a 51-percent stake in the non-joint venture companies, which Wahaha rejected.
    Danone filed its first lawsuit against Wahaha on May 9 in Stockholm.
    On June 4, Danone filed a lawsuit in the Los Angeles against two Wahaha-related companies and two individuals.
    Also in June, Wahaha filed its request to an arbitration commission in the eastern Chinese city of Hangzhou over the disputed transfer of trademarks.
    It also lodged suits in Shenyang and Jilin against Danone executives Emmanuel Faber, who replaced Zong Qinghou as chief of Danone and Wahaha's 39 joint ventures, Qin Peng, China director for Danone Asia and Francois Caquelin, a financial director, claiming they had breached company law or damaged the interests ofthe Danone-Wahaha joint venture.
    Last Thursday, Danone filed a counter claim against Wahaha, alleging that Wahaha had failed to transfer trademarks to their joint venture under an agreement reached in 1996 when their cooperation started.
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