Could a new zealand dairy trader have done more to prevent China's milk scandal? At press time, Sanlu Group milk products contaminated with the toxic chemical melamine had killed four babies, sickened 53,000 and triggered import bans and recalls worldwide. But 43 per-cent of Sanlu is owned by New Zealand cooperative Fonterra, the world's biggest dairy trader, and Fonterra has three people on the seven-member Sanlu board. Still, Fonterra executives were in the dark about the mass poisoning until August-eight months after their Sanlu partners found out. Once inthe loop, they failed to persuade Sanlu to go public for six weeks. "Fonterra," says Paul French, chief China analyst for the Shanghai-based consultancy Access Asia, "apparently believed all the... books in which foreign executives are taught not to let their Chinese partners get offended or 'lose face'."
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