Being Sanlu’s largest stock owner and holding 43 percent of its shares, New Zealand’s diary giant Fonterra issued a statement on its website, “A court in Shijiazhuang China has issued a bankruptcy order against Sanlu …. Sanlu will now be managed by a court-appointed receiver who will assume responsibility for an orderly sale of the company’s assets and payment of creditors…This bankruptcy order is not a surprise to us. We were aware that Sanlu was in a very difficult situation and faced mounting debts as a result of the melamine contamination crisis.”
Attorney Li Fangping who represents victims’ parents told Radio Free Asia on Wednesday that the bankruptcy is a drawback and he is not optimistic on whether the victims will receive any compensation. “We certainly did not expect the court order to close down Sanlu. It is unknown whether parents of the victims can become creditors. None of the victims were ruled or acknowledged by Sanlu to become creditors. Generally in a situation like this the victims do not receive compensation from the sale of the company’s assets.”
Li said he would petition the court to make the parents’ creditors. However, there are already hundreds of agents and distributors wanting to collect debts from Sanlu. Li worried that the group did not have enough assets to pay for the debts and the parents would be left out. “We will do our best but legally the parents are not qualified for receiving compensation. It is very difficult to fight this situation, we need to sit down with the parents and bankruptcy lawyers and talk about our options.”
Mr. Dong from Dali, Yunnan, was outraged because asking for compensation was the only way to get justice for his son, “Now Sanlu is bankrupt and our litigation is meaningless. We don’t know what to do now because parents like me are already silenced<sup>1</sup> by the authority.”
About fifty parents from around the country planned to go to Beijing in January to talk to the other 22 officially-listed melamine powdered milk manufacturers and ask for medical expenses. Yang Yong from Hangzhou had paid for surgery on his 11-month-old son. Last month his son was found to have a kidney stone again. He couldn’t afford another surgery and hoped the companies could help pay for the medical expenses. “Many parents are in deep debt paying for medical expenses and the hospitals have long refused to give free treatment,” said Yang.
Yang was not sure about the exact date the parents would go to Beijing and he worried the local government would interfere with their appeal.
According to media in China, after hearing that Sanlu might file bankruptcy, over 400 agencies from around the country gathered in front of Sanlu’s headquarter on Tuesday. They wanted to collect the 1 billion yuan (US$143 million) they prepaid for the recall of the problematic products. An agent said that they would face financial difficulties or even shutdowns because of Sanlu’s bankruptcy.
Earlier in September 2008, Sanlu was found to be producing melamine contaminated milk that could cause kidney stones or even death in infants. As of November 27, 290,000 children have kidney stones and 11 died because of the tainted milk powder.
Note: [1] Courts and lawyers around the country have been pressured to not accept these product liability cases, so the victims have no voice in the local courts.
Read this article in the original Chinese: http://shenyun.epochtimes.com/gb/8/12/25/n2374217.htm
