Tainted Chinese firm bankrupt

February 12, 2009
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, BEIJING, Feb 12 – Sanlu Group, the dairy firm at the heart of China\’s huge contaminated milk scandal, has been formally declared bankrupt, state media reported on Thursday, citing a local court.

Xinhua news agency said a court in the northern city of Shijiazhuang, where Sanlu is based, had accepted the company\’s bankruptcy filing as it faced 1.1 billion yuan ($161 million) of debt.

"The Shijiazhuang city intermediate court has formally declared Sanlu Group bankrupt," Xinhua said.

The ruling appeared to be the final nail in the coffin for the company, formerly one of China\’s largest dairy firms, which was destroyed by the scandal over chemically tainted milk.

Sanlu was the first of 22 dairy companies revealed last year to have been selling baby milk powder contaminated with melamine.

The chemical is normally used to make plastics but was added to the dairy products to give them the appearance of higher protein content.

The tainted milk products have been blamed for killing six infants in China and sickening nearly 300,000.

Authorities ordered Sanlu to cease production shortly after reports of the contamination first emerged in September.

The company filed for bankruptcy on December 23.

A court last month sentenced Sanlu\’s former chief Tian Wenhua, 66, to life in prison for "manufacturing and selling fake or substandard products."

Sanlu was also fined more than 49 million yuan.

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