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Nation
Print Edition> Nation
UPDATED: January 11, 2009 NO. 3 JAN. 15, 2009
Epilog of a Tragedy
Apologies, court cases, compensation and government reshuffle follow baby milk powder poisoning
By YUAN YUAN
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At the end of the trial, Ran Weiguang, Trade Union Chairman of Sanlu Group, offered apologies to children made sick by the tainted milk and their families on behalf of Sanlu.

The verdict will be announced at an unspecified future date. If convicted of producing and selling fake or substandard products, the defendants could be imprisoned for terms up to life.

Prior to this trial, 17 others were prosecuted for adding melamine-laced "protein powder" to milk or selling tainted milk to Sanlu or other dairies. On December 30, two brothers, Geng Jinping, who is in charge of a milk production base in Hebei's Zhengding County, and Geng Jinzhu, the delivery driver of that milk base, were charged with producing and selling poisonous food by adding melamine to raw milk. They were accused of adding about 434 kg of protein powder, which contains melamine, to more than 900,000 kg of raw milk from October 2007 through August 2008.

Bankruptcy

The scandal saw six babies die and another 29,000 with urinary track ailments, including kidney stones, according to figures from the Ministry of Health. After the scandal surfaced on September 11, 2008, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) conducted a nationwide examination of the dairy products. In total 69 batches of milk products made by 22 dairy companies, including well-known brands Sanlu, Yili, Mengniu and Yashili, were found to contain melamine.

 

IN COURT: Tian Wenhua, Sanlu Group's former Board Chairwoman, goes on trial in Shijiazhuang Intermediate People's Court on December 31, for producing and selling sub-standard products 

The scandal has also brought down several high-ranking officials, including AQSIQ head Li Changjiang, who resigned on September 22. Three officials in Shijiazhuang-Communist Party Secretary Wu Xianguo, Mayor Ji Chuntan and Vice Mayor Zhang Fawang-also stepped down.

Sanlu Group stopped production on September 12. A bankruptcy petition for Sanlu has been filed in the face of 1.1 billion yuan ($161 million) of debt. On December 24, a court in Shijiazhuang issued a bankruptcy order against Sanlu.

New Zealand Fonterra, the major foreign investor of Sanlu and the world's major international trader of dairy products, faced an 846 million yuan ($124 million) investment loss due to the bankruptcy.

"This bankruptcy order is not a surprise to us. We were aware that Sanlu was in a very difficult situation and faced mounting debts as a result of the melamine contamination crisis," said Fonterra CEO Andrew Ferrier.

Fonterra has held a 43-percent stake in Sanlu since 2003, hoping to profit from China's booming dairy market. However, the tainted milk scandal has hurt the dairy industry badly.

Another Chinese dairy company, Beijing-based Sanyuan Food Group, has taken over many of the assets of Sanlu following the scandal. Sanyuan began negotiations with Sanlu on a possible acquisition in September. In mid December, it took over the operation of several Sanlu plants in Shijiazhuang and resumed production, while the acquisition deal was still in negotiation. Negotiations have been surrounded by questions over debts, compensation and shareholding issues.

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