Newsmaker

Dairy tycoon arrrested for illegally collecting public funds

(Xinhua)
Updated: 2010-07-28 10:26

Li Tuchun [Asianewsphoto]

CHANGSHA - Chinese procuratorate had approved the arrest of Li Tuchun, founder of leading Chinese dairy beverage producer "Taizinai" or "Prince Dairy", for illegally collecting public funds, a government spokesman said Tuesday.

The arrest of three others of the top management had also been approved, said a spokesman of Zhuzhou city of South China's Hunan Province, where the Taizinai Group is based.

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Initial investigations since early June showed that the company had illegally taken 130 million yuan ($19 million) in public funds by last December, the spokesman said.

The company went into provisional liquidation in April with a debt of more than 2 billion yuan due to its rapid expansion.

The expansion was once supported by investment banks such as Actis Capital, Morgan Stanley and Goldman Sachs.

Zhuzhou Intermediate People's Court announced the bankruptcy and reorganization of the company last Friday.

Founded in 1996, Taizinai Group quickly expanded a sales networks  covering the entire Chinese mainland, and the "Taizi" brand was nominated as "China well-known trademark" in 2007 by the State Administration of Industry and Commerce.