Jun. 22, 2007 (China Knowledge) – The Mainland's beverage giant, Hangzhou Wahaha Group opposed the appointment of a new chairman for its disintegrating joint venture with Danone <DA>, which it deems as illegal.

The two companies are mired in a long drawn tug of war for the Wahaha trademark, with lawsuits spanning the U.S., Sweden and the Mainland.

The French food giant, Danone, announced the board's decision to appoint its vice-chairman, Emmanuel Faber, as the new leader of the venture and temporary chairman, in place of Wahaha’s founder Zong Qinhua, who resigned as the head of the venture.  

Chinese board members have rejected Danone’s appointment as illegal and maintain that the new chairman should be elected with the consensus of the board.

However, Faber released a statement clarifying that they recognize the need for the board's approval. He added that the Chinese media had misrepresented Danone's announcement of the change of leadership as a finalized decision rather than a proposal to be approved by the board.  

The bad blood between the two companies emerged when Danone, who has a 51% stake in the 39 joint ventures, accused its Chinese partner of breaching the exclusive agreement on the Wahaha trademark by setting up 20 unauthorized independent companies selling products identical to those sold by the joint venture.  

Danone has demanded for a 51% stake in the non-joint venture companies, which the Wahaha Group has rejected.