(Yicai Global) July 24 -- The battle between past and present majority shareholders of Jonjee High-tech for control of the leading Chinese soy sauce producer is escalating as the chairman of the previous owner Baoneng Investment Group and an associate were turned away at the factory gate by security guards twice last week.

Yao Zhenhua, also known as the ‘barbarian’ for his swashbuckling business tactics, is trying to get hold of the company seal, according to a person close to struggling real estate-to-finance conglomerate Baoneng.

Yao was denied entry to Jonjee’s factory in Zhongshan, southern Guangdong province on July 19 by security staff who claimed he had not made a prior appointment.

Then on July 22, Qin Junxue, the head of human resources at Baoneng and Jonjee’s incoming deputy general manager, could be seen in a dramatic video obtained by Yicai Global, ordering the security team to take immediately leave and to hand over to a new security detail that he had brought.

Anyone who disobeyed would be fired on the spot, Qin said. The team would be informed of further arrangements at a later date, she added.

The police were called and the new security team was unable to take over, said the person close to Shenzhen-based Baoneng, which bought a majority stake of 24.9 percent in Jonjee in October 2015, but then was forced to sell most of it in 2021 when the company fell into debt, leaving it with just 9.4 percent.

Jonjee, whose majority shareholder is now Zhongshan Huoju Group with 19.8 percent equity, has reported the incident to the police, the Zhongshan-based company said on its website today. The actions were unauthorized and unlawful. They have endangered the firm’s normal operations and the safety of its personnel and property.

Turn for the Worse

The power struggle for control of the company, which operates in three sectors, namely condiments, auto parts and real estate, and is worth CNY27 billion (USD3.7 billion), has taken a nasty turn since Jonjee said on July 7 that it plans to replace four of its directors, all of which were appointed by Baoneng.

Such a move is in violation of Jonjee’s articles of association and the board of supervisors’ rules of procedure, Zhongshan Runtian Investment, the Baoneng unit in whose name Baoneng’s shareholding in Jonjee is held, said on July 12.

Zhongshan Ruitian is also accusing several of Jonjee’s shareholders, including Zhongshan Huoju, of false litigation and manipulation of securities, which allegedly caused economic losses of about CNY50 billion (USD6.9 billion) to Jonjee, its shareholders and investors.

Editor: Kim Taylor