Success splitting China’s startups

Success splitting China’s startups

Staff Reporter 



Kungfu Catering Management founder Cai Dabiao. (Photo/CFP)

Even if startups can make down the long road to riches, the test is not over. The increasing number of ligitations in China point to the conflict between partners in their now-profitable ventures, where solidarity meets conflicting interests and concepts.

Tsai Dabiao, founder of Chinese fast-food chain Zhenkungfu, recently sued his partners Pan Yuhai and Pan Minfeng, also Tsai’s ex-wife, for illegally convening a provisional meeting of the board of directors on Dec. 9 last year, which appointed Pan Yuhai as the chairman, replacing Tsai.

Previously, Tsai was convicted of fund embezzlement by a people’s court in the Tianhe district of Guangzhou, which sentenced him to a 14-year imprisonment and a fine of 1 million yuan (US$165,000). The plaintiffs were his ex-wife Pan Minfeng and Pan Yuhai, his ex-brother-in-law.

He Yang, director of Beijing Enterprise Research Institute, said that the strife facing Zhenkungfu started with the lack of distinct shareholding allocations at the beginning. The Chinese-language Enterprise Observation said that partner splits is actually a daily occurrence in the business circle in China.

In the wake of its share listing in late 2013, Change Light, a LED maker, for instance, plunged into anarchy as the three founding partners broke up in conflict over the company’s development direction.

In the same vein, last December Cloudary, a literary website, witnessed the breakup of its three founding partners. Two partners, Wu Wenhui and Ho Xiaoqiang, departed the company entirely, leaving only Chen Tianqiao on the management team.

During the fledgling stages, partners of a startup tend to unite under the same corporate objective but their differences over management styles and personalities boil up after the companies gain a solid foothold, often resulting in a breakup.

Observers remarked that partnership is often an ultimate test of humanity. Shi Yuzhu, a veteran entrepreneur, noted that “Partnership is a test of democracy.”


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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