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Author Topic: Tainted milk trial opens in China  (Read 972 times)
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« on: December 27, 2008, 12:09:22 AM »

Six men have gone on trial in China accused of making and selling the chemical at the centre of the tainted milk scandal.

The tainted milk is blamed for killing at least six children and making 300,000 other people ill.

The men are accused of adding melamine to raw milk to make it appear high in protein.

The company at the centre of the scandal, Sanlu, has already been declared bankrupt.

State television showed the two men in court in handcuffs, their heads bowed, being questioned by three judges.

Dairy chain

Police said 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.

Police said they had found an illegal workshop run by the two men in Shandong province in eastern China, where the men made 600 tons of the fake protein powder, and was the largest source of melamine in the country.

The trial started on Friday at the Shijiazhuang Intermediate People's Court, in the town where Sanlu is based.

Lawyers have speculated that sentences could start at 10 years.

When the scandal broke in September, a chain of melamine producers and middlemen was found to have been supplying milk dealers with the product.

The dealers added melamine to boost the apparent protein content of milk, which had often been watered down to spread the raw product further.

Major dairy companies bought the milk from such dealers, failing to test the milk for purity and nutritional value.

Tragic fallout

The result was widespread poisoning of babies, the group most vulnerable to tainted milk as it was their only food source.

Kidney damage was reported in hundreds of thousands of people and at least six babies were killed.

The government scrambled to fight off allegations that it reacted slowly to the scandal, and promised to bring the culprits to court.

Xinhua reported on Thursday that Sanlu has 1.1 billion yuan ($160m) of net debt.

So far, the courts have been rejecting lawsuits filed by the families seeking compensation.

Fonterra, New Zealand's largest dairy conglomerate that held a 43 percent stake in Sanlu, said this week that Sanlu would be managed by a court-appointed receiver who would sell off the company's assets and repay creditors over the next six months.

Fonterra has written off its $114m investment in Sanlu, the company said.
« Last Edit: December 27, 2008, 12:11:31 AM by amg » Logged
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« Reply #1 on: December 27, 2008, 02:12:06 AM »

China firms to compensate tainted milk victims:

BEIJING (Reuters) - Chinese dairy firms that sold baby formula tainted with the industrial chemical melamine will pay compensation to the families of nearly 300,000 children who were killed or sickened as a result, state media reported.

Twenty-two dairy producers will make one-off cash payments to the families, the Xinhua news agency cited China's Dairy Industry Association as saying on Saturday.

It did not disclose the size of the payments or list the firms that would be making the payments.

However, Inner Mongolia Yili Industrial Group, Mengniu Dairy and Bright Dairy group are among the firms found earlier to have produced milk contaminated with melamine.

"The enterprises offered to shoulder the compensation liability. By doing so, they hope to earn understanding and forgiveness of the families of the sickened children," Xinhua quoted the association as saying.

Chinese authorities have said that at least six children died and around 294,000 were made ill earlier this year after they drank formula containing melamine.

The scandal battered faith in Chinese-made products and led to recalls of Chinese-made diary products around the world.

Sanlu Group, the company at the heart of the scandal, was made bankrupt as a result. Sanlu is partly owned by New Zealand's Fonterra group.

Six people have gone on trial for their part in the scandal, accused of producing, selling or buying the chemical to put in milk, as a way of cheating nutrition tests.

(Reporting by Jason Subler; Editing by Valerie Lee)
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« Reply #2 on: December 28, 2008, 11:33:00 PM »

Massive payouts for milk-powder victims

Families of tainted milk-powder victims could receive up to 200,000 yuan ($29,000) compensation from major dairy companies in the coming weeks, media reports said.

The China Dairy Industry Association, a coalition of about 600 dairy manufacturers nationwide, said on Saturday that 22 Chinese producers will provide one-time compensation payments to victims' families, whose infants contracted kidney stones and urinary problems from baby milk formulas tainted by melamine.

The contaminated milk products have killed at least six babies and infected another 294,000 infants. As of last month, 861 babies still remained in the hospital.

Although the association did not release details regarding the amount of compensation the families will receive, Caijing Magazine reported over the weekend that families of children killed by the tainted milk will receive 200,000 yuan ($29,000).

Families of babies hospitalized will receive between 30,000 and 50,000 yuan and compensation will be paid from mid January, the magazine revealed. The payout could be more than 13.5 billion yuan.

The milk companies have also set up a special fund to cover medical bills for future health problems.

"If the babies suffer from relevant after effects, all medical fees will be covered by the fund," the China Dairy Industry Association said.

The association did not name all 22 companies, but 22 is the same number of manufacturers whose milk products were found to have contained excessive toxic chemical.

The association said Hebei-based Sanlu Group, which filed a bankruptcy petition to a local court last week with a debt of 1.1 billion yuan, was among the 22 companies providing compensation.

The company, whose milk products caused the most widespread damage to infants, borrowed 902 million yuan ($132 million) to pay the medical fees of the sick children.

Tian Wenhua, former chairwoman and general manager of the fallen dairy giant, will stand on trial on Dec 31 for producing and selling substandard products. The 66-year-old faces the death penalty because the defective products caused deaths.

Li Xiongbing, a lawyer leading a group petition for the victims' families, told China Business News that Sanlu's bankruptcy should not sidetrack compensation procedures.

The petition group has urged for a compensation fund to be set up nationwide.

Illegal milk dealers used melamine, a industrial chemical used to produce plastic, as a "protein powder" to boost false protein readings in the milk products.

Cui Xiaohuo (China Daily)
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