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Chinese Tainted Milk Scandal Company Declares Bankruptcy

A Chinese court has declared bankrupt the dairy company at the center of China's tainted milk scandal.

A local court in China's Hebei province has assigned a receiver to manage the company's assets and repay its debtors.

Sanlu was the first milk manufacturer found to be selling products tainted with the industrial chemical melamine when the scandal surfaced in September.

Tainted milk from Sanlu and some 20 other Chinese companies sickened nearly 300,000 children and killed six.

Melamine can cause kidney stones if taken in excessive levels, and babies who were fed tainted milk powder were the most widely affected.

The company's major foreign investor, New Zealand's Fonterra Group, says the Sanlu Group was facing mounting debts as a result of the melamine contamination crisis.

Many families are seeking to bring the responsible companies to trial, but say the courts are blocking their petitions.

The Chinese government recently announced that it was considering a compensation plan for families whose babies were killed or sickened by melamine-tainted milk.

China's tainted milk scandal led to recalls and bans on a number of Chinese food products worldwide. The scandal has forced the government to acknowledge safety gaps in China's food industry and to promise tough new regulations.

Some information for this report was provided by AFP and AP.