Sanyuan denies auction report

BEIJING, April 6 -- Sanyuan Foods Co has said it won't take part in an auction for the remaining assets of the Sanlu Group and denied a news*** report.

The Securities Times said in a report on Thursday that Sanyuan would buy these assets as part of its development strategy, citing an unidentified source. But the company denied the report in a statement it filed to the Shanghai Stock Exchange after the market was closed on Friday. Hebei Jiahai Auction Co said on March 21 that it would auction Sanlu's remaining assets tomorrow.

Beijing-based Sanyuan said in the statement that its board of directors had decided not to auction for the remaining assets of Sanlu Group.

The assets held by the bankrupt Sanlu Group, which was at the core of the tainted milk scandal, include a 70 percent stake in Tangshan Sanlu Co and a 16.97 percent interest in Junlebao Dairy Co.

The Sanyuan Group had won a bid to buy Sanlu's core assets on March 4. It acquired the assets for 616.5 million yuan ($90 million), including land use rights, manufacturing equipment and a 98.8 percent stake in a dairy producer, owned by Sanlu Group in Xinxiang in Henan Province.

(Source: Shanghai Daily)