On October 25, at the entrance of Red Bull China in Huairou District, Beijing. Photo source: Reporter Yue Qi/Photo

Introduction: Schrödinger's cat has become a household thought experiment, simply put, a cat in a superposition of life and death. Now, Red Bull China (i.e., Red Bull Vitamin Beverage Co., Ltd.) is like such a bull in a superposition of life and death.

The "dead" state is that Red Bull China's operating term has expired, and the controlling shareholder, Red Bull Vitamin Beverage (Thailand) Co., Ltd. (hereinafter referred to as Red Bull Thailand), has repeatedly stated its refusal to extend operations.

The "alive" state is that Yan Bin, the actual controller of Red Bull China, claims to hold a legal document regarding a 50-year cooperation commitment between the two parties, which could extend Red Bull China's life.

The most direct impact of this life-and-death superposition has already become apparent. On October 25, through on-site visits and multiple confirmations, reporters found that Red Bull China's Beijing production base has been halted for some time.

Operating Term Expired, Factory Halted ▲▲▲ As an internationally renowned functional beverage, the Red Bull brand was founded by Xu Shubiao in Thailand in 1966. In December 1995, Xu Shubiao and Thai-Chinese businessman Yan Bin established the predecessor of Red Bull China in Shenzhen, marking Red Bull's entry into the Chinese market. On September 30, 1998, Red Bull China was re-registered in Beijing as a joint venture.

According to Red Bull China's official website, Red Bull beverages currently have five production bases in Beijing, Jiangsu, Guangdong, Hubei, and Hainan, with sales companies spread across the country. However, reporters found that within the vast Red Bull system in China, only Red Bull China, located in Huairou District, Beijing, is recognized by Thai Tiansi Medical and Health Co., Ltd. (hereinafter referred to as Tiansi Medical, which owns the "Red Bull" series trademark rights) as the domestic company authorized to produce Red Bull beverages. Many other production bases and sales companies actually belong entirely to Yan Bin's Huabin Group.

Records from the National Enterprise Credit Information Publicity System show that September 29, 2018, was the expiration date of Red Bull China's operating term. This means that if the shareholders fail to reach a consensus on extending the company's operations, the cooperation between Yan Bin and the Xu family will officially end. Including Red Bull China, many domestic Red Bull factories will no longer be able to produce Red Bull beverages.

Against this backdrop, Red Bull China's current operations are under particular scrutiny.

Aerial view of Red Bull China's interior in Huairou District, Beijing. Photo source: Reporter Yue Qi/Photo

"The factory has been halted for some time, and internal renovations are currently underway, expected to be completed within the next two days," said a factory employee who had just finished work on October 25 outside the Red Bull China plant. Several other Red Bull China employees also confirmed the temporary suspension of work at the factory.

The desolate scene inside the factory seems to corroborate these statements. Reporters observed that, unlike other surrounding factories bustling with production activities and frequent delivery vehicles, few material transport or incoming vehicles entered the Red Bull China plant that day. The security guard at the company's main gate was highly vigilant towards outsiders and refused the reporter's visit request.

On October 17, in response to online rumors about Red Bull China's halt, a Huabin Group staff member told N+ Finance reporters that there was no halt, only the factory's annual overhaul. However, a Red Bull China factory employee stated that before this overhaul, Red Bull China had already entered a state of suspension.

Additionally, staff at the Huaibei Industrial and Commercial Office in Huairou District told reporters that Red Bull China's management had consulted them about business matters and revealed: "The factory is currently halted because the business term change hasn't been approved yet. During the application period, the factory is maintaining equipment and not producing."

However, there has been no obvious shortage of Red Bull in Beijing-area supermarkets, and it is currently impossible to determine the production status of Red Bull factories in other regions.

Inside Red Bull China, staff are inspecting and cleaning factory equipment. Photo source: Reporter Yue Qi/Photo

Red Bull China in a Life-and-Death Standoff ▲▲▲ Behind the halt at Red Bull China lies its life-and-death superposition state.

Red Bull China currently has four shareholders: Red Bull Thailand (controlled by the Xu family) holds 88%, Beijing Huairou District Township Enterprise General Company holds 1%, Inter Biopharmaceutical Holdings Limited (a wholly-owned company of the Xu family) holds 7%, and Global Market Holdings Limited (a wholly-owned company of Yan Bin) holds 4%.

Regarding the expiration of the joint venture's operating term, the Xu family has repeatedly expressed through Red Bull Thailand and others their refusal to extend operations. Red Bull China, under Yan Bin's control, claims that the company was established based on a 50-year cooperation agreement between the two parties and has submitted an application for extension of the business term to the relevant authorities in accordance with legal procedures.

For China Red Bull, both "life" and "death" possibilities are on the table, but neither will come quickly.

A document obtained by N+ Finance reporters shows that Red Bull China's articles of association contain specific provisions on the joint venture's term, suspension, and extension: "If all parties unanimously agree to extend the cooperation term, subject to a board resolution, a written application should be submitted to the examination and approval authority six months before the contract expires, and extension can only be granted after approval... When the cooperation term expires and the joint venture is terminated, the board should propose liquidation procedures, principles, and candidates for the liquidation committee, form a liquidation committee, and liquidate the joint venture's assets at book value."

According to these articles, any extension of Red Bull China requires unanimous consent from all shareholders. Staff at the Huairou District Administration for Industry and Commerce registration department also told reporters that the cancellation of a joint venture requires the signed consent of all shareholders; otherwise, the industrial and commercial department cannot process it. However, "unanimous consent" is clearly impossible at present. To this end, on October 24, Red Bull Thailand issued another statement saying that on October 15, 2018, it had legally filed a legal procedure with the Beijing First Intermediate People's Court to force the liquidation of Red Bull China.

At the entrance of Red Bull China, the logo of two bulls butting heads now evokes much thought. Photo source: Reporter Yue Qi/Photo

Normal extension and liquidation both require unanimous consent from all parties, while litigation procedures require more time for adjudication. Red Bull China is in this prolonged standoff.

There is another possibility for Red Bull China to survive: Yan Bin, who holds shares in Red Bull Thailand, could potentially influence or shake Red Bull Thailand's decisions. However, according to a document exclusively obtained by N+ Finance reporters, members of the Xu family currently control Red Bull Thailand's decision-making power. Moreover, a Thai court litigation document confirmed by reporters shows that Red Bull Thailand's board has resolved to remove Yan Bin and others from their positions as Red Bull Thailand's representatives on Red Bull China's board, remove Yan Bin as chairman and legal representative of Red Bull China, and remove his status as Red Bull Thailand's legal representative recorded with Chinese government departments.

However, this judgment has not yet affected China's industrial and commercial registration records, creating another standoff.

The standoff at two levels has truly put Red Bull China into a "life-and-death superposition" state, making production quite awkward. Staff at the Beijing Administration for Industry and Commerce told reporters that if a company's operating term expires and it hasn't applied for extension, it certainly cannot engage in production activities; if found, corresponding penalties will be imposed. If the company continues production, reports or complaints can be filed.

Reporter: Li Shiqi Source: N+ Finance (ID: njcjnews) -END-