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Staff of Sanlu dairy group to be employed by new owner

(Xinhua)
Updated: 2009-02-17 15:48

SHIJIAZHUANG - The prospective bidder for the bankrupt Sanlu Group, a Chinese dairy company at the center of a milk adulteration scandal, will guarantee to employ all present staff, the company told an employee congress Tuesday.

Employees who had signed contracts with Sanlu will be able to join the new company, under a plan for employees of the bankrupt company announced at the congress.

Related readings:  Sanyuan stock up on Sanlu buy bid  Sanyuan shares up 10% on planned bid for Sanlu's assets  Dairy firm Sanyuan to bid for scandal-hit Sanlu  Sanlu assets to be auctioned off

As of the end of 2008, Sanlu had 4,332 registered active-duty staff, 455 retirees and three employees with industrial injuries.

The Shijiazhuang municipal government has asked any potential bidder to guarantee that it would employ all Sanlu staff after an auction of the company's assets, a government official from the Sanlu bankruptcy work team said on condition of anonymity.

That auction is scheduled for March 4 at the Intermediate People's Court of Shijiazhuang, capital of north China's Hebei Province.

Sanlu Group's land use rights, buildings, machines and equipment will be auctioned off. Assets also include Sanlu Group's investment rights and interests in three other dairy companies, according to a joint statement by the Hebei Jiahai Auction Co. Ltd., Hebei Dongfang Auction Co. Ltd. and Hebei General Auction Co. Ltd.

The court declared the company bankrupt last Thursday.

Beijing-based dairy company Sanyuan has confirmed that Sanyuan Group, through subsidiary Hebei Sanyuan, would bid in the auction.

A Xinhua reporter saw executives from Sanyuan present at the employee congress Tuesday morning.

Sanlu leased its plants to a subsidiary of Beijing Sanyuan Foods Co. Ltd. in December, days after the bankruptcy petition was accepted by the Shijiazhuang Intermediate People's Court.

Sanlu stopped production on September 12. Its melamine-tainted baby milk powder was found to have caused the deaths of at least six children and sickened some 300,000 children.

Last month, it was fined 49.37 million yuan (about US$7.15 million) by the Shijiazhuang court, which also imposed a life sentence on Sanlu chairwoman Tian Wenhua.