The country's most well-known soft-drink brand has been sold, but not to the foreign beverage manufacturer everyone expected.

Instead, the state disposed of its controlling stake in Guangdong Jianlibao Group to a mainland investment company with no experience in the beverage industry.

After conquering China's soft-drink market in the 1980s with Jianlibao-brand carbonated orange drinks, the Guangdong-based company saw sales drop in the late 1990s.

Last year, Jianlibao's market share in China shrank to less than 5 per cent, while Coca-Cola and Pepsi claimed the majority.

Last month, the media reported that the Sanshui municipal government would sell a 45 per cent stake in the beverage manufacturer to Tee Yih Jia Food Manufacturing of Singapore.

However, Zhejiang International Trust and Investment Co (Zitic) bought the majority stake in Jianlibao.

Neither Jianlibao Group executives nor Sanshui municipal government officials directly answered reporters' questions as to the apparent about-face on the Singapore deal and why the company was eventually sold to a domestic firm.

Jianlibao founder and chief executive Li Jingwei is reported to have opposed the sale of Jianlibao to Tee Yih Jia.

The Nanfang Daily reported yesterday that about a dozen investors, including the French food giant Danone, Morgan Stanley and HSBC Investment Fund, had expressed strong interest to the Sanshui municipal government about buying Jianlibao.

The company is not entirely owned by domestic shareholders. In 1986, Jianlibao received an emergency cash injection from one Hong Kong and one Macau investor, who received 15 per cent and 10 per cent stakes in the company respectively.

Newspapers in Guangdong reported that Zitic bought a 75 per cent stake in Jianlibao for 337.5 million yuan (about HK$316.23 million), which would represent Sanshui municipal government's entire stake.

However, Xinhua reported that Zitic bought an 80 per cent stake in Jianlibao for 360 million yuan. A spokesman for the Sanshui municipal government said the Xinhua report should be considered the more accurate.

Zitic deputy chief executive Zhang Hai has indicated that Zitic would invest another 300 million yuan to 400 million yuan into Jianlibao on restructuring, returning the company to its core business of selling sports drinks, and hopefully take it public.