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by Tara Overzat
SanLu has been ordered by a Shijiazhuang Court to place control of the company into the hands of a receiver (much like a Trustee in US Bankruptcy Courts) for the company’s assets to be sold off. The case is reported to have been brought forth by an unpaid creditor.
Fonterra, a New Zealand company and the world’s largest dairy exporter, owns a 43% stake in SanLu. A 56% share is owned by the city government of Shijiazhuang, according to the China Daily, an English-language state-run newspaper. Who, then, is the unnamed creditor who brought the case to court? Some articles have implied that it is the distributors, others the families of babies who drank tainted milk, and still others say it is a combination of the two. Even if this is a result of some heretofore unheard of class-action lawsuit brought against SanLu, ChinaStakes.com reports that the Shijiazhuang government already lent SanLu money to compensate the victims.
Nevertheless, there is no clear-cut party thus far reported in this case.
Was this case really brought forth by an unnamed creditor? With SanLu being the biggest purveyor of dairy products in China it is hard to believe they
Courtesy of http://en.hebeitour.com.cn/
would actually owe one of their creditors enough money for them to file a bankruptcy claim. Even with the melamine scandal, could sales have dropped off that significantly for the company? After all, SanLu was not the only milk company to have tainted products. Is it possible that China has decided to make an example of the milk giant in order to show just how serious they are about the issue? Was executing Zheng Xiaoyu, head of the State Food and Drug Administration (SFDA), not enough?
Apparently not. China now wants to put the head of SanLu on trial, with the prosecution seeking the death penalty, which is handed out as freely to the convicted as candy to Halloween-costumed children. The following is from ChinaStakes.com:
“The People’s Intermediate Court of Shijiazhuang, Hebei Province, Sanlu’s home base, has announced that Sanlu Group and its general manager, Tian Wenhua, will stand a public trail starting at 8am, December 31, as they have been charged by public prosecutor of producing and selling counterfeit goods.
According to the article 144 of China’s criminal law, a person who produces or sells poisonous or harmful food, leading to the death of a person or especially serious harm to human health, can be sentenced to death. The world-known food safety scandal sent thousands of babies in to hospital and caused some deaths.” (The full article can be found here.)
Like all things under China’s Communist government, the real facts and actual details are murky. The China Digital Times translated a great article from www.dwnews.com (found here) expressing not only that the government is responsible for the tainted milk scandal, but that it covered it up until 1 September 2008 in order to avoid negative press during the Olympic Games, and may not have acted at all without the pushing of the New Zealand government.
If we assume the above to be true, that the government’s mismanagement led to this crisis, then the solution is to take one government owned entity, SanLu, and sell it to another government owned entity, Sanyuan Group, which is said to have passed all “strict” food safety tests, tests which are given by the… government. Yes, this should end well.
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