Five more companies buy shares from melamine-scandal Sanlu Group

SHIJIAZHUANG, May 5 (Xinhua) -- Five more companies on Tuesday bought shares previously owned by the bankrupt Sanlu Group, a Chinese dairy firm at the center of last year's melamine contamination scandal.

The stakes were auctioned in Shijiazhuang, capital of the northern Hebei Province, said sources with the Jiahai Auction Co.,Ltd.

The assets at the auction Tuesday morning included Sanlu's shares in four Hebei-based companies and a Tianjin company -- the Tianjin Sanlu Ltd., Co, from which the Sanlu held 51 percent of the shares. Auction of the company's shares failed to win bids this past April as the starting prices were too high.

The auction was not open to media.

According to an unnamed auctioneer with Jiahai, most of the buyers were shareholders of these enterprises. But he didn't give details of the buyers.

Two more auctions are expected to be held on May 8 and 12, when more shares, as well as trademarks and 12 patent rights, are to be under the hammer.

Four planned auctions of Sanlu's assets have been held -- the last one being the April auction that failed to win any bids.

Sanlu Group, which was based in Shijiazhuang, had been China's leading seller of milk powder for 15 years until the melamine adulteration scandal broke in September last year. The group's revenue hit 10 billion yuan (about 1.5 billion U.S. dollars) in 2007.

The company's tainted baby milk powder was found to have caused the deaths of at least six children and sickened more than 300,000others.

Background:

From Aug. 2 to Sept. 12 in 2008, Sanlu Group produced 904 tonnes of melamine-tainted baby formula powder and sold 813 tonnes of the tainted products, making 47.5 million yuan (6.9 million U.S. dollars).

The Ministry of Health said it was likely the tainted milk scandal with Sanlu Group at its center killed at least six babies. Another 294,000 infants suffered kidney stones and other urinary problems.

Sanlu Group, partly owned by New Zealand dairy product giant Fonterra, stopped production on Sept. 12. A bankruptcy petition for Sanlu has been filed in the face of a 1.1 billion yuan debt.

On Dec. 19, the group borrowed 902 million yuan to pay the medical fees of children sickened by its melamine-tainted baby formula and to compensate the victims.

Last year, 1,173 suspects in Hebei Province were arrested over these charges,local governmentsaid.

Meanwhile, 1,244 government employees were investigated on corruption accusations.

The province's total arrests last year were put at 43,000.