Behind Niu Gensheng's Resignation

On the evening of June 11th, 02319.HK announced that the company was the founder of the company.

"Niu Gensheng's departure is expected. He must leave.

There are two reasons: first, his focus and focus are no longer in Mengniu; second, he has reopened the battlefield.

People familiar with the dairy industry said to the Securities Daily reporter.

"The total departure of cattle will not have any effect on Mengniu, nor will there be any major personnel changes."

Mengniu Group President Yang Wenjun (column) in an interview with reporters.

Niu Gensheng - the 3 retreat

Six years ago, Niu Gensheng had made some remarks which were vividly remembered.

In September 2005, Niu Gensheng announced that he would resign as president of Mengniu Dairy.

It was recognized as a prelude to Niu Gensheng's retirement.

At that time, many people speculated that Niu Gensheng simply wanted to withdraw from Mengniu Group to "enjoy his old age". Some even said that it was Sanlu Tian Wen Hua incident, which allowed Niu Gensheng to fully understand the lesson from the past.

Six years later, however, it turned out that the exit was not the original intention of Niu Gen Sheng.

"Niu Gensheng quit in 2005, quit in 2008, and now quit again. As far as I know, in 2005, Niu Gensheng had 2 companies at the same time, so the listed company suggested that he could not concurrently with two. So he returned once in a row, and quit in 2008 to make a shift, in fact, he was looking for a substitute for himself.

And this retreat is not a complete retreat, he also left a non-executive director, in fact, he can not completely withdraw because he has a personal stake, so that he can be an ordinary investor, he will not be willing, so he left himself a tail.

It can be seen from this that he is not willing. "

The person familiar with the analysis said.

For the reasons for Niu Gensheng's resignation, Mengniu Dairy said in the announcement that Niu Gensheng planned to devote most of his time to charity work to achieve his long cherished wish in the past few years, so he resigned as chairman of the board, but "he will retain the position of non-executive director and continue to participate in the strategic planning of the group."

"At that time, there must be some differences and opinions in this matter. Resignation is only to let him leave honorably. Actually, it is not the same thing. If there is only two reasons for leaving a person willingly, first, I do not have the ability; second, I know that the whole story must be left before detonation, and we must find a shelter before the storm comes."

The person familiar with the matter said.

So for Mengniu, the "loan door" of 2009 is a topic that Niu Gensheng can not avoid.

COFCO

September 11, 2008 was a nightmare for Niu Gensheng.

Melamine is also a very painful word for Niu Gen Sheng. In this global credit crisis, Mengniu, known as the most responsible dairy company, has been criticized many times besides Sanlu.

Mengniu plunged Mengniu into an unprecedented predicament caused by melamine scandal. On the one hand, Niu Gensheng must prevent the old ox foundation from mortgaging 4.5% of Mengniu shares of Morgan Stanley to others' hands. On the other hand, he also had to find a bigger strategic buyer to help Mengniu solve the increasingly exhausted cash flow.

So, in order to maintain the 4.5% stake, Niu Gensheng wrote a ten thousand letter to his fellow entrepreneurs and students from the Yangtze River Business School.

Niu Gensheng's ten thousand words magnified the dilemma of Mengniu, and at that time, Ning Ning saved him.

Ning Gao not only saved Niu Gensheng, but also Niu Gensheng successfully cash in 955 million yuan.

In 2009, COFCO and Magnolia investment jointly formed a new company (COFCO Holdings 70%) and became the largest shareholder of Mengniu.

At that time, people seemed to be a hit and go deal. Mengniu received cash, while COFCO put a key piece on the food industry chain.

After entering Mengniu, COFCO accounted for 3 non-executive directors in the board of directors of Mengniu Dairy, and Ning Gaoning served as vice chairman of the board.

"Niu Gensheng is very smart. At that time, Niu Gensheng signed an agreement with COFCO. In 3 years, COFCO did not meddle in Mengniu, so from now on, COFCO has not yet taken part in specific business activities, but it has been 3 years since 2009, and COFCO has gone too far, and it is starting to move."

The person familiar with the matter said.

How much money did Mengniu fund at that time when Niu Gensheng wrote about the ten thousand words and Mengniu crisis?

No one knows.

If it hadn't been for COFCO to save him, he would have done it, "the insider said.

"What about Mengniu?

Ning Gao Ning's mind must be counted.

The person familiar with the matter said.

So Niu Gensheng's departure seems to be more responsible for the year.

Another battlefield -- modern animal husbandry

Prior to that, Niu Gensheng had arranged modern animal husbandry ahead of schedule.

Public information shows that the modern animal husbandry was the leading animal husbandry industry. It was founded in September 2005 by 13 natural persons and Mengniu Ma'anshan company, such as Mengniu former vice chairman Deng Jiuqiang and other former executives and their relatives.

In July 7, 2008, the modern animal husbandry was registered and the legal representative was Deng Jiuqiang.

After four rounds of equity financing, Brightmoon three party, a charity trust company established by KKR, CDH venture capital and Niu Gensheng, became a controlling shareholder through Aquitair company, holding 50.5% of the stock of modern animal husbandry.

Wang Dingmian, a dairy expert, told reporters in an interview with the Securities Daily that it is easy to see the shadow of Mengniu from the development process of modern animal husbandry. Its creation, financing and capital operation are exactly the same as Mengniu, and it is closely related to Niu Gensheng.

He said at the same time: "the most important point is that the modern ranch is independent of Mengniu Group.

At present, COFCO is still afraid to move fully because the COFCO has yet to fully understand the operation of the dairy industry, but in fact, the original group of Mengniu has gone almost the same.

After Niu Gensheng resigned, his main battlefield and all the teams have been pferred to modern animal husbandry.

In response to speculation about Niu Gensheng's manipulation of modern animal husbandry behind the scenes, Deng Jiuqiang had said earlier that there were not many Mengniu Dairy companies in the management of modern animal husbandry. Niu Gensheng did not hold shares in the company and had no organizational relationship with the company.

But the modern animal husbandry prospectus shows that since the establishment of the company, most of its sales revenue has contributed to Mengniu, accounting for 98.9% and 99.6% of the milk sales in 2008 and 2009 respectively.

The two sides also signed a long-term contract of purchase. Mengniu allowed modern animal husbandry to sell more than 30% of raw milk to third parties, but not to two other major rivals of Mengniu.

"If Mengniu is Niu Gensheng's first child, then modern animal husbandry is his second child."

Wang Dingmian described it so.