Yili’s Chairman Pan: A Chinese business story


Yili is one of China’s big two dairy firms along with Mengniu. Both companies are based in Inner Mongolia, although the former is state-controlled while Mengniu was founded in 1999 by a former Yili employee. Mengniu and Yili both escaped China’s 2008 melamine milk scandal more or less unscathed, but I believe the Chinese public remains dubious about the domestic dairy industry as a whole. Which is perhaps one reason why this story has legs:

  • Earlier this month, we noted the story of two Chinese writers who were detained and accused of “defamation and picking quarrels and provoking troubles” (诽谤罪、寻衅滋事罪 fěibàng zuì, xúnxìn zīshì zuì) for online “slurs” about the giant dairy company Yili.
  • The writers were accused of circulating a WeChat posting of a “fictional” story about a company very similar to Yili, run by a chairman very similar to Yili boss Pan Gang 潘刚. The dairy boss in the story ends up detained by the police.
  • On March 26, Yili’s share price fell by more than 3.5 percent after the WeChat postings went viral.  
  • Yili’s response at the time was to state that Pan had been out of the public eye and in the U.S. receiving medical treatment, but that he continued to participate in regular decision making and important meetings while abroad.
  • Today, Yili’s shares jumped by 10 percent “after video footage showing the company’s chairman and CEO Pan Gang attending its annual shareholder meeting in his first high-profile public appearance recently, squashing rumors that the chairman had been taken away for investigation,” according to the South China Morning Post.

“Some argued that this incident has exposed a weak point in China’s non-comprehensive information disclosure system, as there are no clear rules on what information a listed company should reveal to shareholders,” says the South China Morning Post.

However, not even the most stringent disclosure rules could change the fact that successful Chinese businesspeople regularly disappear in mysterious circumstances. Sometimes they resurface, sometimes they are convicted of crimes, and sometimes they never appear in public again. Below are a few recent cases: