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Home >> Business
UPDATED: 08:48, April 01, 2005
Local govt sets up Jianlibao task force
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Guangzhou: Sanshui district government under Foshan Municipality has established a special task force to help handle the production and sales of the once national beverage flagship Jianlibao Group.

An official from the district government said 11 branches of Jianlibao around the country have recently resumed production.

"Any shareholding disputes will be solved through legal means," said the official who declined to be named, adding that he would not comment further on the shareholding issue until the courts allow it.

In addition to production and sales, the special task force will also be responsible for the firm's delayed payments to employees, as well as bank loans, the official said.

Most Jianlibao employees have received payment that was in arrears, the official said.

And negotiations with Jianlibao's creditors and banks are also well underway, the official added.

Jianlibao's output reached 62,270 tons while its industrial production hit 258 million yuan (US$31 million) in the first two months of this year, up a year-on-year 42.9 per cent.

And its sales volume is expected to reach more than 300 million yuan (US$36.45 million) in the first quarter.

The official said the local government is expecting Jianlibao, a former industry giant in the sports beverage market, to get firmly back on track in the coming years.

Jianlibao, established two decades ago, once reached an industrial production of more than 6 billion yuan (US$729 million), becoming the first domestic beverage brand name.

The firm's heyday came in the early 1990s when its drinks were best sellers, on a par with Coca-Cola and Pepsi.

Its Jianlibao brand of carbonated drink was once known as "China Magic Water."

The company also developed juice, mineral water and tea brands in the following years.

But Jianlibao's star began to fade in the late 1990s due to poor management and stiff competition.

Local media reported Jianlibao amassed a total debt of more than 1 billion yuan (US$121 million).

In early 2002, Zhang Hai, a mogul of China's capital market, took over as Jianlibao's chairman and CEO, after he claimed to have purchased 80 per cent of the group's shares.

Under Zhang's reign, Jianlibao diversified its operations and conducted a series of equity investments, until a halt in the supply of raw materials brought production almost to a standstill in mid-2004.

Zhang also ran a football team in the country's top league called Jianlibao in 2003.

But Zhang was removed from his post of president and CEO in August last year.

And on March 24 this year, he was detained by police for alleged embezzlement and the misappropriation of a large sum of public funds.

Zhang, 31, was not granted bail due to the seriousness of his case.

Guo Yong and many of Zhang's assistants and subordinates have also been detained by police for further questioning.

Zhang is suspected to have collaborated with several senior officials of Jianlibao Group to embezzle and misappropriate public funds totalling as much as 700 million yuan (US$85.1 million).

He is currently being held in custody in Foshan.

Source: China Daily


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