The battle for power from relatives to enemies

On December 12, 2013, the Guangzhou Tianhe District Court found Cai Dabiao, chairman of Yuanzhen Kungfu, guilty of two counts of embezzlement and misappropriation of funds. , sentenced to 14 years in prison and confiscated 1 million yuan of personal property. At this time, Cai Dabiao, who was standing in the defendant's seat, did not change his expression. He was already prepared for the pain of prison. He just felt that all this was a last resort. So what exactly happened to make this CEO of the Chinese catering industry, the CEO of Zhen Kung Fu, put in shackles? What made him turn against his once close partner, his brother-in-law?

It all starts with the creation of real Kung Fu.

The predecessor of Zhen Kung Fu

In 1990, Pan Yuhai, Cai Dabiao’s brother-in-law, founded 168 Dessert House in Dongguan. Started his own catering business. At almost the same time, Cai Dabiao and his wife Pan Minfeng also went into business and opened a hardware store. Pan Yuhai, who is good at cooking, is running a flourishing restaurant, while Cai Dabiao's hardware store is doing poorly at this time. In 1994, Cai Dabiao decided to close the hardware store and join his brother-in-law's restaurant to run it together. With the persuasion of his sister Pan Minfeng, Pan Yuhai agreed to join his brother-in-law. He closed the old restaurant and his brother-in-law invested 40,000 yuan each, and opened a new restaurant next to National Highway 107 in Dongguan. He named it 168 Steamed Products Restaurant. This was the predecessor of Zhen Kung Fu. The brother-in-law and his brother-in-law partnered up to start a real kung fu empire.

Pan Yuhai holds 50% of the shares in the new restaurant, while Cai Dabiao and his wife Pan Minfeng each hold 25%. Because Pan Yuhai is the chef, he masters the restaurant's recipe and controls the core of the restaurant - the quality of the dishes. Therefore, the early dominance of the restaurant rests with Pan Yuhai. Pan Minfeng is mainly responsible for the cashier work and Cai Dabiao is responsible for the reception.

Because Pan Yuhai’s cooking skills are really good, the business of 168 Steamed Products is booming, and they have opened three local branches.

The beginning of the standardization of Chinese fast food

In 1997, when Cai Dabiao and Pan Yuhai visited a garment factory in Dongguan, they accidentally discovered a steam stove, and Pan Yuhai came up with the idea of ??developing computers. Ideas for controlled steam cabinets and steam ovens. So he invited professors from South China University of Technology to develop a "computer programmable steam cabinet" and "steam pot" under his own leadership. The research and development of this equipment was successful, and Chinese fast food was quickly standardized and processed on a large scale. Therefore, at the end of 1997, the restaurant expanded and worked hard to develop into a chain restaurant. Since 168 was a number when registering a trademark and could not be registered as a trademark, they registered a two-seed food company. Register the trademark "Double Seed". The company's shareholding structure remains unchanged. The two seeds mean that the two major shareholders, Pan Yuhai and Cai Dabiao, are like two seeds, helping each other and working together.

Brother-in-law's road to power

In the early days of starting a business, Pan Yuhai controlled the company because he controlled the recipe of the dishes, while Cai Dabiao always lacked a voice in the management of the company and could not bear it. I have always been very depressed when it comes to the respect of employees. Therefore, in 2003, Cai Dabiao had a conversation with Pan Yuhai and proposed to serve as president of the company (Pan had been the president before), and proposed a change of office every five years. Pan Yuhai felt that his brother-in-law had a talent for planning, which would be beneficial to the development of the company. In addition, he had always known that his brother-in-law was depressed, so he agreed to Cai Dabiao to serve as president for one term, while he took on the responsibility as vice president. Store development work across the country.

Under Pan Yuhai's development, the number of restaurant stores increased from more than 60 in 2003 to 253 at the end of 2007. At the same time, after 2005, he began to be responsible for the development of North China, and only It took two years to make the North China region profitable. Then, from 2006 to 2007, he took charge of the management of the East China region. It took less than a year to turn the East China region from a loss to a profit.

Xiang Zhuang dances with sword and intends to play Pei Gong

Although Cai Dabiao became the company's president in 2003, the company's operations are still under the inertial control of Pan Yuhai. Things took a turn for the better in 2004.

In 2004, Double Seeds entered Guangzhou, but the start was not smooth, so Cai Dabiao invited well-known planner Ye Maozhong to re-plan the brand. Ye Maozhong said that the name "Double Seeds" was not conducive to opening up the market in first-tier cities, and suggested using the new brand "Zhen Kung Fu". At first, Pan Yuhai disagreed. He believed that "Double Seeds" had been in business for seven years and had considerable brand value. The two had a fierce argument over this, and finally, with Cai Dabiao's insistence and persuasion, Pan Yuhai agreed to use "real kung fu".

Facts have proved that Cai Dabiao’s proposition is correct, and Zhen Kung Fu’s profitability and growth rate have been significantly improved. Because of this, Cai Dabiao established his dominant position in the company. And in the days that followed, employees increasingly felt that Cai Dabiao had stronger management capabilities than Pan Yuhai.

As Cai Dabiao’s status increased, he also began to endorse True Kung Fu. Externally, Cai Dabiao even concealed the fact that the predecessor of True Kung Fu was founded by Pan Yuhai. He also claimed that the standardized equipment of Zhen Kung Fu was developed by himself, and that he took all the credit for the expansion of the store. Pan Yuhai’s contribution was never mentioned. As a result, the media almost only reported on Cai Dabiao and ignored Pan Yuhai. Although Pan Yuhai was angry, he remained silent for the sake of the company's development.

At the same time, in order to control the company, Cai Dabiao arranged for his relatives to enter the management and supply chain of Zhen Kung Fu. His younger brother Cai Liangbiao monopolized the computer supply of Zhen Kung Fu, and his eldest sister Cai Chunmei took control of Zhen Kung Fu's purchasing business. Served as purchasing manager. The eldest brother-in-law, Li Yueyi, monopolizes the specialty food and kitchen utensils in stores across the country, and the younger brother-in-law, Wang Zhibin, monopolizes the supply of real Kungfu poultry. Real Kung Fu slowly became the Cai family's family business.

Divorce increases equity

Just as Cai Dabiao gradually gained control of his real kung fu, an unexpected incident increased Cai Dabiao's equity. In September 2006, because Cai Dabiao was outsourcing his mistress, Pan Minfeng finally agreed to divorce Cai Dabiao and exchanged his 25% controlling interest for custody of his son. Therefore, Cai Dabiao and Pan Yuhai each hold 50% of the shares. At that time, Zhen Kung Fu was financing. In order not to affect Zhen Kung Fu's financing and to prevent the children from knowing about their parents' divorce, Pan Minfeng continued to live with Cai Dabiao as usual after the divorce.

The person who contacted Zhen Kung Fu at that time was Xu Xin, the president of Capital Today. Although Cai Dabiao had no obvious conflict with his brother-in-law Pan Yuhai at that time, in Xu Xin's view, the shares of both parties were quite the largest in the company. Hidden danger. Under this ownership structure, the probability of business failure is 95%. So Cai Dabiao found Pan Yuhai and tried to persuade Pan Yuhai to reduce his equity through equity transfer. Pan Yuhai knew that once transferred, he would be in danger, so he rejected Cai Dabiao.

In order to cooperate with financing, Cai Dabiao decided to "family-ize" and implement standardized corporate management. He introduced a group of airborne executives from McDonald's, KFC, etc., such as CFO Hong Renggang, which also led to the decline of the company. A large number of elders left, weakening Pan Yuhai's internal power. At the same time, Cai Dabiao visited the automobile factory to learn the management process. This series impressed Xu Xin, so Capital Today and Zhongshan Linkage each invested 150 million yuan in real effort, each holding 3 shares. Cai Dabiao and Pan Yuhai's equity was diluted to 47.

Cai Dabiao broke his promise, and the shareholders broke up

Five years passed quickly, and Cai Dabiao’s term was about to expire in 2008. According to the original agreement, he should give up the president to Pan Ukai. However, after the extremely ambitious Cai Dabiao got a taste of power, he would not hand over the management rights easily. He refused to hand over the position of president. At this time, Pan Yuhai had basically been sidelined, and all the entrepreneurial veterans had already left. The managers who were airborne were all Cai Dabiao, including the investor representatives on the board of directors, who were also more inclined to Cai Dabiao, who was good at management.

At this time, Pan Yuhai was very unconvinced.

For five years, he has been abiding by the agreement and being Cai Dabiao's supporter behind the scenes. Everything was taken over by Cai Dabiao. No matter what differences of opinion he encountered, he always supported Cai Dabiao's leadership first. Cai Dabiao even deceived the media and tampered with the history of real kung fu. , He doesn't care about twisting the facts, and Cai Dabiao not only failed to fulfill the original agreement, but also completely marginalized himself.

Pan Yuhai was not willing to be just a shareholder, so in early 2008 Zhen Kung Fu internally negotiated a plan acceptable to all parties: establishing a subsidiary and creating a new brand "Master Ha", mainly engaged in beef On the other hand, this new brand is completely managed by Pan Yuhai, and Cai Dabiao stated at the shareholders’ meeting that Zhen Kung Fu invested 50 million to support Master Ha’s operations. This creates a pattern where Cai Dabiao is in charge of real kung fu and Pan Yuhai is in charge of Master Ha.

But things often don’t go so smoothly. Master Ha’s business progress is not going well. He spent 16 million in the first year but had no effect. Pan Yuhai deeply felt the hardship of running a new brand, and even more disappointed. What hit him hard was that at the beginning of 2009, Pan Yuhai asked Cai Dabiao to cash in the remaining 34 million investment, but Cai Dabiao refused on the grounds that Zhen Kungfu was short of cash. At the same time, Cai Dabiao planned not to let Pan Yuhai participate in the year-end summary meeting of Zhen Kung Fu, or even let him know the relevant arrangements for the year-end meeting. At the same time, Cai Dabiao unilaterally cut off Pan Yuhai's information window for understanding Zhen Kung Fu - the OA system. The most disgusting thing is that during the Spring Festival of 2009, Pan Yuhai sent an open letter to employees to express New Year greetings, but Cai Dabiao forcibly deleted it.

Pan Yuhai was completely angered. Pan Yuhai, who lost his mind, did an incredible thing in order to retaliate against Cai Dabiao. In early 2009, Zhen Kungfu successfully applied for an unsecured loan of 100 million yuan from the bank. , in order to disturb the loan, Pan Yuhai immediately told the bank that the shareholders had conflicts and the loan was risky, and he would not hesitate to try to suspend the bank's loan, even if he was a shareholder. Cai Dabiao was so angry that he finally got the loan with the guarantee of the capital side. The occurrence of this incident meant a complete break between the two shareholders. The brother-in-law and brother-in-law turned against each other. And this is just the beginning.

Immediately after August 2009, according to the agreement signed by the shareholders when the venture capital investment was made in 2007: the general manager was appointed by Cai Dabiao, the deputy general manager was appointed by Pan Yuhai, and Pan Yuhai signed and appointed his brother Pan Guoliang served as deputy general manager, but Cai Dabiao did not agree with the appointment and prohibited Pan Guoliang from entering the True Kung Fu Headquarters office. So Pan Minfeng, Pan Yuhai's wife Dou Xiaolei, and Pan Guoliang blocked the gate of the True Kung Fu Headquarters for 5 hours. Afterwards, the board of directors of Zhenkongfu condemned the shareholder Pan Yuhai and the board supervisor, and asked Cai Dabiao and Pan Yuhai to resolve the relevant differences on their own. Obviously, Capital Today and Zhongshan Linkage, as venture capital investments, sided with Cai Dabiao.

Cai Dabiao’s conspiracy and escape plan

Obviously, at this point, cooperation between the two parties is impossible, and there is little hope for a peaceful separation. Both parties have control over the company. Everyone is determined to win. Therefore, Cai Dabiao made up his mind to hire a lawyer and control the real kung fu by any means. After analyzing the advantages of both parties, the lawyer formulated a "shelling" plan for Cai Dabiao from a legal perspective. By transferring Zhen Kungfu's assets, business, supply chain, etc. to a new legal entity, the original enterprise became an empty shell. , completely eliminating Pan Yuhai.

This plan is divided into three steps

1. Control the board of directors. After receiving the investment in 2007, the board of directors consisted of five people: Cai Dabiao, Pan Yuhai, Pan Minfeng and representatives of Capital Today and Zhongshan Liandong representative, Cai Dabiao first acquired the equity of Zhongshan Liangdong 67, thereby controlling the board of directors of Zhongzhan Liangdong. At the same time, the business period of Double Seed Company expired on June 30, 2009, and it will be liquidated. At that time, it will be appointed as the double seed company. Pan Minfeng naturally resigned from the board of directors. In addition, Cai Dabiao dismissed the current supervisor Dou Xiaolei through the board of directors on the grounds that he was incompetent and replaced him with Cai Dabiao. At this point, Cai Dabiao successfully controlled the board of directors.

2 After taking control of the board of directors, Cai Dabiao will prepare to escape. First, he plans to vote on the board of directors to replace all the legal representatives of the eight subsidiaries under Zhen Kung Fu's name with himself. Then they voted to strip the Zhen Kung Fu trademark from Guangzhou Zhen Kung Fu Catering, in which Cai Dabiao and Pan Yuhai each held 50% of the shares, and give it to Dongguan Zhen Kung Fu.

3 Once the above preparations are made, Cai Dabiao will jointly establish a new company with Zhongshan Linkage and Capital Today, and sell Zhen Kung Fu's subsidiaries to his new company through a vote of the board of directors for approximately net assets. In this way As soon as he arrived, Cai Dabiao completed his golden cicada escape plan, and his original real skill became an empty shell. Pan Yuhai could only get a sum of money allocated based on equity for selling assets, and was completely eliminated.

Cai Dabiao believed that his plan was perfect and began to implement it step by step.

Cai Dabiao fled after the Dongchuang Incident

While Cai Dabiao was plotting the "escape" plan, Pan Yuhai asked to see Zhen Kung Fu's account books after Pan Guoliang failed to enter. But he was refused, so Pan Yuhai sued Zhen Kungfu. In February 2010, the court sentenced Zhen Kungfu to hand over the first closing accounts to the accounting firm commissioned by Pan Yuhai for audit. The struggle between the two sides entered a fever pitch

On March 17, 2011, some senior executives of Zhen Kung Fu, including Cai Dabiao’s secretary and deputy general manager Hong Renggang, were taken away by the police on suspicion of economic crimes. When Cai Dabiao was suspected of embezzling public funds and fled, he signed two written documents before fleeing, appointing his younger sister Cai Chunhong as chairman, and nominating vice president and financial director Xian Shunxiang as the company's general manager. This person's name was recognized by other directors of Zhen Kung Fu. Support, but Pan Yuhai does not approve of this appointment.

On March 18, Pan Yuhai led a group of people to take control of the real Kung Fu headquarters and monitor Cai Chunhong’s office. At the same time, Pan Yuhai issued internal documents to the vice president, financial director Xian Shunxiang, and legal manager Xu Xiaoxiang. , human resources manager Feng Jing and others were suspended.

On April 11, Pan Yuhai announced a set of confidential documents obtained from the safe at the Zhen Kung Fu headquarters, which is the escape plan formulated by Cai Dabiao. After obtaining this secret document, Cai Dabiao was taken to court. On April 22, Cai Dabiao, who had fled, was arrested. Then on May 11, Zhen Kung Fu announced that the vice chairman would serve as chairman. At this time, Pan Yuhai officially took control of Zhen Kung Fu. The battle ended temporarily with Pan Yuhai's victory.

But Pan Yuhai did not completely win, he only temporarily took control of the real kung fu. In 2013, Cai Dabiao was sentenced to 14 years in prison, but he only lost his personal freedom and suffered the pain of prison. Cai Dabiao, who was in prison, voted to appoint Pan Yuhai because he was not present as a board member and had no corresponding representatives. The company filed a lawsuit with the court on the grounds of being the chairman of the board of directors, requesting that the appointment of the board of directors be invalid.

On 20th, 2016, the court ruled that the board of directors' resolution was invalid, and Zhen Kungfu appealed against the court's decision, and the case is still being heard. Pan Yuhai may face losing his position as chairman. At the same time, because Cai Dabiao owes nearly 100 million in bank loans and other payments, and the Cai family is unable to repay them, Cai Dabiao's equity is being auctioned. There may be new forces entering the board of directors to compete for control of Zhen Kung Fu. Right, this battle is still going on.

Comments

1. The real struggle for rights brings huge harm to the company. As a founder, the initial equity structure must be reasonable. Avoid incidents like real kung fu.

2 As an investor, you should take the development and profit of the enterprise as your stance. You should not take sides when conflicts arise between shareholders. You should act as a middleman to mediate conflicts, resolve crises, and make the enterprise more profitable. better.