the centre of a parallel distribution network. 10% of its share capital is held by Zong's wife, Shi Youzhen, and 90% by Zong's personal vehicle Ever Maple Trading Ltd., registered in the British Virgin Islands. Its legal representative is Zong's daughter Zong Fuli. Zong set up non-jv owned factories, such as the Hangzhou Xiushan Shunfa Packaging Co. (杭州萧山顺发食品包装公司), to manufacture or pack products identical to WHH. Danone further alleges that dealers were asked to set up new bank accounts for their deposit payments in the name of WHHFBSC to sell products from these factories. Trademarks The Wahaha trademark was assigned to the main joint venture vehicle on 29 February 1996, and a joint venture agreement was eventually signed on 28 March 1996. Danone insist that the joint venture agreement with valid and exclusive rights of production, distribution and sales of products under the Wahaha brand, for which Danone paid Hangzhou Wahaha Group the sum of RMB 100 million, including 50 million from the joint venture vehicle. Local government approval was obtained. However, WHH maintains that rules in force stipulate that trademark transfer agreements must be approved by the National Trademark Bureau, while local government powers are limited to a veto. The transfer was denied by the National Trademark Bureau according for the rule safeguarding national assets. Although the regulations over the transfer of trademarks was apparently lifted in October 2001, the parties signed an additional contract in October 2005 covering the use of the trademark covering company names and products. Day to day management control Danone agreed to terms of joint venture which did not give it much involvement, allowing the day-to-day running of the company rested in the hands of Zong, while he continued in his autocratic ways. Zong has even boasted about the managers sent by Danone whom he had sent packing. Danone gave Mr. Zong room to move since "he operates in a very entrepreneurial way, making a lot of decisions on his own." Up until just before the conflict became public, Zong was allowed to pursue his own commercial strategy through external ventures where Danone had no wish to be. However, Danone felt that it was time to claw back a stake in the external ventures. Beginning of public row Danone had made several attempts to buy out Zong, but was rebuffed. Danone and Zong signed a deal in December 2006, allowing Danone to buy out