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SCMP Reporter

Firm's bankruptcy may mean  no cash for melamine sufferers
The families of the nearly 300,000 babies made ill by melamine-  tainted milk face a new hurdle in seeking compensation: the bankruptcy of Sanlu Group.
Lawsuits against the company - whose melamine-laced infant milk powder triggered the industry-wide scandal in September - were already mired in a legal limbo because many mainland courts have neither accepted nor rejected the cases.
Other courts have refused the cases, saying the scandal is still under investigation.
The announcement on Wednesday of Sanlu's bankruptcy has now plunged the families of the victims into new uncertainty: who  will pay compensation?
The government of Sanlu's home city, Shijiazhuang , in Hebei province , said yesterday at a press conference that the firm  had a negative net worth of 1.1 billion yuan (HK$1.25 billion) and was insolvent.
Meanwhile,  former Sanlu chairwoman Tian Wenhua   will go on trial on  Wednesday  for 'the manufacture and sale of shoddy products', Caijing magazine reported.
The anxious parents of affected children are puzzled about what to do next.  'I felt helpless after reading the news of Sanlu's bankruptcy,' said Ms Chang,  the mother of a three-year-old girl who developed kidney stones after drinking Sanlu infant formula for most of her life.
'I also felt angry and disappointed that the Shijiazhuang city government didn't mention  help for victims at the press conference at all.'
Ms Chang was one of the plaintiffs in the first collective compensation lawsuit brought against Sanlu, a case that was not accepted by Hebei Higher People's Court.
The health ministry said  this month that dairy companies would probably have to pay for a compensation plan  that the government was preparing.
Wang Jianguo ,  a spokesman  for the Shijiazhuang  government, said Sanlu borrowed 902 million yuan  this month for the treatment of  sick babies and for compensation. He did not elaborate.
Li Fangping, a Beijing lawyer seeking compensation for  ill children, said: 'Nobody knows what kind of compensation the company is referring to ... Since the outbreak of the scandal, all the decisions were made behind closed doors.'
On Wednesday it was revealed that Sanlu was bankrupt, prompting 400 to 500  distributors to converge on Shijiazhuang. They claimed Sanlu owed them up to 1 billion yuan in prepayments or deposits, and  were worried  about possibly being forced to help Sanlu pay compensation for a problem  they say they were not responsible for.
One legal expert told  China Central Television  that, according to mainland bankruptcy law, consumers could ask Sanlu's distributors to pay compensation  on the theory that they were jointly liable.
That provoked sharp comments from some distributors.
'We distributors are also victims of the scandal,' one said.  'If this is true, we have no way to survive.'
Sanlu halted milk production on September 12  and has recalled suspect products worth 1 billion yuan.  Its products were the first to be found laced with melamine, an industrial chemical.
Twenty-two dairy  firms were eventually involved in  the scandal, which not only rocked the mainland's milk industry but also tarnished the 'Made in China' label.
At least six babies died and more than 290,000 others nationwide showed symptoms of urinary disorders after  consuming the tainted milk.



Sanlu victims' compensation under threat