This undated photo shows a pair of twins from Minxian county, northwestern China's Gansu province, who suffered from kidney stones after drinking Sanlu baby formula milk power that contained the industrial chemical melamine.[Photo: cnwnews.com]
Children suffering from kidney stones as a possible result of drinking melamine-tainted Sanlu-brand milk powder will not be able to receive any compensation from collapsed dairy maker Sanlu Group, the Guangzhou Daily reports.
The People's Intermediate Court in Shijiazhuang, capital city of north China's Hebei province, where the former milk giant was based, issued the verdict on Nov. 20, but it was first revealed on Friday, Nov. 27 during a Beijing court hearing of the first trial for the families who were suing the milk company for compensation.
It said Sanlu Group's liquidity ratio for common claims stood at zero percent, for which it would be impossible for it to pay further compensation, which falls under the category of common claims.
Chinese law stipulates that companies declared bankrupt must first pay their employees' salaries and social security payments, followed by their bank debts.
Payments for common claims come last, which means they remain unpaid in some cases because companies do not have enough assets left to cover them.
Peng Jian, an attorney who represents compensation cases, said Sanlu had no disposable assets after it had paid its employees' salaries and bank loans.
The verdict came just days after two criminals were executed for their roles in producing and selling the toxic baby formula, which killed six children and made more than 300,000 sick nationwide.
Before filing for bankruptcy, Sanlu had borrowed 902 million yuan to pay medical fees and provide other compensation to sick children in December, 2008, and a medical compensation fund was jointly set by Sanlu together with other 21 enterprises that were all involved in the tainted milk case. However, the issue still remains unsolved till today due to disputes over the compensation schemes. |
