Melamine brothers on trial for tainted milk scandal

Two Chinese brothers, Zhang Yujun and Zhang Yanzhang is at the center for a trial being accused of illegally making and selling melamine that shocked the world on the tainted milk scandal. The tainted milk scandal which started in September 2008 is blamed for killing six children and sickening nearly 300,000 others in China as well as caused Melamine milk panic throughout South East Asia.

Zhang Yujun and Zhang Yanzhang are blamed for illegally manufactured and sold a “protein powder” or "fake protein" composed mainly of melamine and malt dextrin. The powder was added to raw milk to make it appear high in protein content.

If found guilty, the brothers will likely be sentence to death with a bullet in the head.

In addition, Sanlu the major milk powder manufacturer which produced the tainted milk powder is reported to be bankrupt with mountain of debt.

UPDATES
* Jan 22, 2009: Death sentence over fake milk and melamine

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From TheStar

Two Chinese go on trial for selling melamine

BEIJING: Two Chinese went on trial Friday accused of making and selling the chemical at the centre of a tainted milk scandal blamed for killing six children and sickening nearly 300,000 others.

Police say Zhang Yujun and Zhang Yanzhang illegally manufactured and sold a “protein powder” composed mainly of melamine and malt dextrin, the official Xinhua News Agency reported. The powder was added to raw milk to make it appear high in protein content.

An official at the publicity office of Hebei supreme court confirmed that the trial started Friday at the Shijiazhuang Intermediate People’s Court. He refused to give his name or other details.

Sanlu Group Co, the main company in the scandal, is based in Shijiazhuang. The company confirmed earlier this week that it was bankrupt.

Police say they found an illegal workshop run by the two Zhangs on the outskirts of Jinan in Shandong province in eastern China, according to Xinhua. Police say it made 600 tons of the fake protein powder from September 2007 to October 2008 and was the largest source of melamine in the country.

Xinhua reported Thursday that Sanlu has 1.1 billion yuan (RM560mil) of net debt and that a branch of the Shijiazhuang City Commercial Bank was the creditor that applied to a court to have Sanlu declared bankrupt.

It said the intermediate court in Shijiazhuang had accepted the filing. Xinhua said Sanlu owes a creditor 902 million yuan (RM462mil) it borrowed earlier this month to pay for the medical treatment of children sickened after drinking the company’s infant formula, and for compensation of the babies’ families.

Wang Jianguo, spokesman for the Shijiazhuang city government, said the money was given to the Dairy Association of China for medical care and compensation fees for victims, according to a transcript of a news conference he gave Thursday.

A woman who answered the phone Friday at the association refused to answer any questions.

The issue of compensation for the families of the children sickened or killed has become a sensitive one, with courts so far not accepting any lawsuits filed by the families.

The Legal Daily newspaper reported that Tian Wenhua, Sanlu’s chairwoman and general manager, would go on trial Wednesday in Shijiazhuang for “selling fake and shoddy products.”

Sanlu, like a number of major Chinese dairies, had been exempt from government inspections because it was deemed to have superior quality controls -- until high levels of the industrial chemical melamine were found in its baby formula and other products in September. Several other dairies were also found to have sold tainted goods.

Melamine poses little danger in small amounts but larger doses can cause kidney stones and renal failure.

Sanlu is 43%-owned by New Zealand daily cooperative Fonterra Group. -- AP

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From TheStar

Chinese dairy in milk scandal faces $160M debt

BEIJING (AP) - The dairy at the center of China's tainted milk scandal has about $160 million in debt, state media reported Thursday, a day after the company confirmed it was bankrupt.

Xinhua News Agency said Sanlu Group Co. faces 1.1 billion yuan ($160 million) of net debt and that a branch of the Shijiazhuang City Commercial Bank was the creditor that applied to a court to have Sanlu declared bankrupt.

The Intermediate People's Court of Shijiazhuang, a city in Hebei province where Sanlu is based, accepted the filing, Xinhua said.

The report quoted Wang Jianguo, city spokesman, as saying that as of Oct. 31, the company's total assets were valued at 1.56 billion yuan ($227 million) while its total debts were 1.76 billion yuan ($256 million), the report said.

Xinhua said Sanlu also owes a creditor 902 million yuan ($132 million) in funds it borrowed earlier this month to pay for the medical treatment of children sickened after drinking the company's infant formula, and for compensation of the babies' families.

Calls to the spokesman's office of Shijiazhuang city government rang unanswered while a bank clerk who answered the phone at the Shijiazhuang City Commercial Bank said the bank's director was unavailable for comment. Sanlu's officials could not be reached.

Sanlu, like a number of major Chinese dairies, had been exempt from government inspections because it was deemed to have superior quality controls _ until high levels of the industrial chemical melamine were found in its baby formula and other products in September.

Several more dairies were also found to have doctored their goods in a scandal that was blamed for killing six babies and sickening 294,000 children.

The dairy scandal highlighted the widespread practice of adding melamine, often used in manufacturing plastics, to watered-down milk to fool protein tests.

Investigations also discovered it was being added to animal feed after finding melamine-spiked eggs.

Melamine poses little danger in small amounts but larger doses can cause kidney stones and renal failure.

Sanlu is 43 percent-owned by New Zealand daily cooperative Fonterra Group.-AP

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