15 Feb 2009

Sanlu assets to be auctioned

2:09 pm on 15 February 2009

The assets of the Sanlu Group which was involved in a tainted milk scandal that killed six children in China will be sold at auction early next month.

The announcement was made by the official news agency Xinhua on Friday.

Former Sanlu chairwoman Tian Wenhua was sentenced to life in prison last month and fined $US3.6 million for her role in the scandal.

Her sentence has now been appealed.

She was convicted last year at Shijiazhuang Intermediate People's Court of manufacturing and selling fake or substandard products.

Two men have been sentenced to death and three former Sanlu executives have received prison sentences of five to 15 years.

Xinhua also said Sanlu borrowed $US132 million to pay medical fees for 300,000 children who fell ill last year after they drank milk laced with melamine, a toxic industrial compound.

Xinhua said this added to SanLu's debt burden.

SanLu was a joint venture company, 43% of which was owned by Fonterra, a New Zealand dairy group.

Xinhua also said the Shanghai Municipal Bureau of Quality and Technical Supervision has found no melamine in milk powder produced by Dumex, the powdered-milk unit of France's Danone

Local media earlier reported that Dumex products had caused 48 children to become ill.