Chinese tainted milk scandal company bankrupt

A Chinese court has declared bankrupt the company at the centre of a scandal over tainted milk - blamed for killing six children and sickening almost 300,000 more, one of the company's owners said today. New Zealand's Fonterra Group said that a court in Shijiazhuang, in China's Hebei province, had issued a bankruptcy order against Sanlu in response to a petition from a creditor. "Sanlu will now be managed by a court-appointed receiver who will assume responsibility for an orderly sale of the company's assets and payment of creditors", Fonterra chief executive Andrew Ferrier said in a statement.

Sanlu was one of 22 Chinese dairy companies whose products were found to contain high levels of the industrial chemical melamine, leading to the deaths of six babies and causing 294,000 others to suffer urinary problems. Fonterra, a New Zealand farmer-owned cooperative, owns 43 per cent of Sanlu. At least a dozen individual lawsuits have been filed against state-owned Sanlu, but they are in legal limbo because the courts have neither accepted nor refused the cases - a sign of the scandal's political sensitivity.

The scandal has been met with public anger in China, particularly among parents whose children were sickened from drinking infant formula authorities had certified as safe. The government has promised free medical treatment to those children, plus unspecified compensation to them and families of the dead. The Health Ministry said earlier this month that some Chinese dairy companies would likely have to pay for a compensation plan, the details of which have not been released. * AP