It is better to fine the boss than the company. For Shuanghui's 120 million-yuan fine, did the chairman of the board take on 37.64 million yuan of the penalty?

On the evening of October 9, Shuanghui Development released an announcement packed with massive information. Due to the excessive lincomycin residue in the "hind pork cuts" at Wangkui Shuanghui in Heilongjiang, the company, its subsidiaries, and relevant senior executives have successively received administrative penalty decisions from regulatory authorities in three locations: Wangkui County, Heilongjiang Province, and Luohe City, Henan Province. The total fines imposed on institutions and individuals exceed 120 million yuan. 

However, what truly shocked the market is the appearance of "Wan Hongwei, Chairman of Shuanghui Development, was fined 37.6462 million yuan personally" on the penalty list. The personal fine for the senior executive accounts for a considerable proportion of Shuanghui Development's net profit in 2025, far exceeding the usual magnitude of personal fines in China's food safety sector in the past. 

When the "top leader" of a meat product giant with a market value of over 80 billion yuan is imposed a personal fine of tens of millions of yuan due to veterinary drug residue issues in a batch of pork, a clear signal may be released that the system of "penalizing individuals for food safety violations" has moved from paper to reality. 

1. How was the 37.64 million yuan fine calculated?

To understand the weight of this figure, we must first clarify its legal basis. The direct basis for this personal fine on senior executives is Article 75 of the Revised Regulations for the Implementation of the Food Safety Law in 2019. This clause establishes a system publicly known as "the strictest in history" — "penalizing individuals with fines". That is, where a food production and operation enterprise falls into any of the circumstances of "intentionally committing illegal acts", "the illegal act is of egregious nature" or "the illegal act causes serious consequences", in addition to imposing penalties on the enterprise, the legal representative, principal responsible person, directly responsible supervisor and other directly responsible personnel of the entity shall also be fined not less than one time but not more than ten times of their income obtained from the entity in the previous year. 

Wan Hongwei's fine of 37.6462 million yuan means that the regulatory authority determined that his "income obtained from Shuanghui Development in the previous year" was between 3.76 million yuan and 37.64 million yuan, and the penalty reached the upper limit of the legal range. Ma Xiangjie, the President, was fined 5.661 million yuan; Qiao Haili, the Vice President, was fined 6.4694 million yuan; Wang Yufen, the Chief Engineer, was fined 6.5862 million yuan. The total personal fines of the four senior executives amount to about 56.36 million yuan. 

Professor Hu Jiguang from the Law School of Renmin University of China pointed out in an interview with People's Daily Online that this is exactly the original intention of the legislation: "How to make the managers of food enterprises truly assume their primary responsibilities is the top priority. It is very necessary to increase the penalty intensity, especially to add the 'penalizing individuals with fines' system."

In other words, when fines are only imposed on the company, the "pain" of the senior management is indirect and can be shared. But when the fine is directly targeted at the personal wallet, and the amount is as high as tens of millions of yuan, food safety is no longer "the company's business", but first and foremost "one's own business". 

2. Why was Wan Hongwei fined the most heavily?

The illegal facts listed in the penalty decision outline a series of loopholes in the management chain of Shuanghui's headquarters: failure to formulate inspection standards for the "rest period for live pigs", failure to equip with a food safety director that matches the scale of the enterprise as required, failure to strictly implement the established testing management specifications, and even mistakenly stating "5,892 heads and 38,863 heads" as "5,892 batches and 38,863 batches" in the apology statement, which was recognized as a violation of the Anti-Unfair Competition Law. 

The common feature of these problems is that they did not occur in the pigsties of farmers, but in the headquarters management system of Shuanghui. The failure to formulate inspection standards is the absence of system construction; the failure to fully equip the food safety director is the dereliction of organizational guarantee; the failure to implement the testing specifications is the failure of the supervision mechanism. 

As the chairman of the board, Wan Hongwei bears the top leadership responsibility for these management defects at the headquarters level. Different from the personnel of the subsidiary directly responsible for production operations, the responsibility of the "top leader" of a listed company lies in establishing and maintaining a set of effectively operating food safety management systems. When this system has systematic omissions and eventually leads to unqualified products flowing into the market, "unawareness" is no longer a valid reason for exemption from liability. 

It is worth noting that Shuanghui's parent company WH Group specifically confirmed in the announcement that the relevant non-compliance matters "do not involve any dishonesty or fraudulent conduct by Mr. Wan or Mr. Ma, nor are there any integrity issues". This statement indirectly indicates that the logic of this penalty is not to investigate personal moral flaws, but to consolidate management responsibilities. Even if there is no subjective malice, dereliction of duty in management also requires paying the corresponding price. 

3. What signal does the "penalizing individuals" measure convey?

The "penalizing individuals with fines" system is not a new system introduced in 2026, but the Shuanghui case is of landmark significance as it is truly applied to impose tens of millions of yuan level fines on the core senior executives of large listed companies.

The Food Safety Law revised in 2015 has already introduced qualification penalties for responsible persons: the persons in charge of enterprises whose licenses have been revoked shall not be engaged in the food industry within five years, and those who are sentenced to penalties for food safety crimes shall be prohibited from engaging in the industry for life. However, that is mainly a "post-incident industry ban" and lacks immediate economic punishment. 

Article 75 was added to the Regulations for the Implementation of the Food Safety Law in 2019, which filled the gap in property penalties. In the following years, this clause was gradually applied in cases involving small and medium-sized food enterprises and individual industrial and commercial households. The market regulatory authority of Langfang City disclosed that since 2021, the city has imposed property penalties on 3 principal responsible persons for food safety illegal acts, with a total fine of 397,100 yuan. Compared with the magnitude of fines in the Shuanghui case, the previous law enforcement practice was obviously in the "trial run" stage. 

The difference of the Shuanghui case is that it expands the application scope of the "penalizing individuals" system from the operators of small and medium-sized enterprises to the chairman of China's largest meat product enterprise in one leap. This marks an important shift in regulatory logic: the larger the enterprise scale and the stronger the market influence, the higher the duty of care of its senior management on food safety, and the heavier the personal responsibility after violating the law. 

From the perspective of system designers, the deterrent effect of this "precision strike" cannot be replaced by imposing fines on the enterprise entity. When the company is fined, the cost is ultimately shared by all shareholders; when the individual is fined, it directly hits the vital interests of decision-makers. When the personal wealth of the "top leader" is directly linked to food safety, the priority ranking of internal corporate governance may undergo substantial changes. 

In the short term, the financial impact of this fine on Shuanghui is controllable. The company's announcement stated that the penalty will reduce the attributable net profit in 2026 by 63.8066 million yuan. Considering the profit volume of Shuanghui Development in 2025, this impact is still within the acceptable range, and it does not trigger the mandatory delisting situation for major illegal acts. 

But the real impact lies beyond the financial figures. For Shuanghui's senior management team, this penalty redefines the boundary of "food safety responsibility". In the past, food safety problems might mean public relations crises, short-term sales decline or an internal circular; after that, it means that individuals may face fines equivalent to several times their annual salary. This change in incentive structure will force the management to raise the priority of food safety risk management to an unprecedented level. 

For the entire food industry, the Shuanghui case provides a clear vane. When senior executives of leading enterprises are imposed tens of millions of yuan level personal fines for dereliction of duty in food safety management, the old logic that "food safety is the company's business, not my business" is being broken. 

The deeper significance is that this penalty echoes the public's expectation that food safety supervision should "show its teeth". Shuanghui promised in its apology statement to carry out comprehensive rectification in six aspects, including strengthening source control, upgrading testing capabilities, and optimizing process management. It remains to be seen whether the rectification can be implemented effectively. But at least one point is certain: when the "pain" is no longer an abstract figure, but a specific entry in one's personal account book, the motivation for change may be more real than ever before.

This article is from the WeChat Official Account "Financial Gossip Girl Channel" (ID: baguanvpindao), written by Ji Shan, and authorized for release by 36Kr.