Fake materials, export ban blamed for HK businessman's suicide

PUBLISHED : Thursday, 16 August, 2007, 12:00am
UPDATED : Thursday, 16 August, 2007, 12:00am

The co-owner of a Guangdong company at the centre of a US toy recall claims his late Hong Kong business partner was the victim of fake raw materials and a new export ban, mainland media reported yesterday.

Cheung Shu-hung, the Hong Kong partner of Lee Der Industrial in Foshan, committed suicide at a company's warehouse at the weekend after concerns about excessive lead levels prompted US firm Mattel to recall 967,000 toys that his company made.

Lee Der's mainland co-owner and chairman, identified as Mr Xie, said the company presented new production samples for testing early this month but the Foshan Entry-Exit Inspection and Quarantine Bureau temporarily refused to accept them, the Southern Metropolis News reported.

The bureau said that under state quality supervision rules producers subject to recalls were not allowed to send their goods for testing during the 'rectification period', temporarily halting all of their export business.

Mr Xie said the ban was a blow to Cheung and destroyed his plans to resume exports of new products to pay salaries and cover materials costs.

He said Mattel also gave Lee Der new orders valued at tens of million yuan and allowed the export of newly certified toys on August 2 after Cheung worked to improve production standards, the report said.

He said he remembered Cheung saying a few days before his suicide that he was unlucky to have stepped on a landmine in the Sino-US trade war.

Mr Xie said Lee Der had been losing money for several years after it was set up in 1993 but Cheung had helped it turn around and had created a good reputation for the company.

'Mr Cheung put all his care and energy into the company for more than 10 years,' Mr Xie said. 'He had kept trying to improve workers' living conditions and treatment. All the workers trusted him.'

A Lee Der worker that Cheung employed for almost 12 years said the death saddened him.

'We think he was also the victim of the fake paint because we did not make it by ourselves,' he said.

Lee Der workers have blamed their supplier, Dongxing New Energy, for providing the lead-laced paint. However, Mr Xie said Dongxing was also a victim of Zhongxin, a factory in Dongguan that had made the paint's colour powders.

He said that Zhongxin had duped Dongxing with fake quality certificates and used about 200kg of lead-laced raw materials in its paint before Mattel's lab found the substandard samples.

Seven people associated with Zhongxin have fled since the scandal came to light and were wanted by Dongguan police, the report said.

Mr Xie said other partners of the company were working to provide support to its workers who may lose their jobs.

'This is the wish of Mr Cheung, that we don't want to become a burden to the society and government,' he said.