(Yicai Global) Oct. 26 -- Major investors in two of the five companies involved in the latest dairy scandal to rock the industry, including Grass Green Group and New Hope Group have sought to distance themselves from partners and individual employees involved and apologized unreservedly.
In total, 19 suspects from five different companies were arrested for their part in a food safety scam involving 276 tons of expired dairy products used in baking that were imported from New Zealand, disguised as animal feed.
Grass Green Group is the investment vehicle owned by New Hope Group Co., China's largest privately-held agricultural company. In a statement on Oct. 25, Grass Green said that it invested in Shanghai Jiawai International Trade Co., the company involved in the scandal, but did not disclose the exact amount of investment.
Grass Green apologized unreservedly to the public and declared that it would take control of Shanghai Jiawai, as well as full responsibility for the company's operations and management in the future.
Legal authorities concluded after an investigation that the illegal activities, repackaging expired dairy products, modifying the date of production and reselling them at less than market rate were masterminded by the former manager, a Mr. Liu, of Jiawai International Trade.
The case was also connected with criminal offenses committed by individuals at Shanghai Jiangdi International Trade Co., an affiliate of Jiawai.
Grass Green Group has strongly condemned the illegal activities carried out by the former manager of Jiawai International Trade as well as expressing profound apologies for its failure to exercise thorough due diligence over its partner company and fulfill its regulatory obligations.
Mr. Liu Yonghao, founder of New Hope Group, started out in the feed business in the 1980s. The Liu family currently ranks No. 25 in the Hurun China Rich List with total assets of CNY45 billion. Mr. Liu founded the investment vehicle, Grass Green Group, jointly with several partners in 2015. The new company focuses on investment projects in the consumer goods sector.