This may turn out to be nothing, or not. Nasdaq-listed Synutra International is again under investigation for its infant formula. First involved in the melamine-tainted baby formula scandal in 2008, in 2010 its formula was accused of triggering sexual precocity among baby girls, though the health ministry found the allegations to be baseless. Now it is products have been reported to be the cause of the death of a baby boy in Jiangxi.
Liang Zhang, the company’s chairman and chief executive, has denied that Synutra’s products were responsible (full statement), and welcomed the investigations now being conducted by provincial and local authorities. All local distribution of Synutra’s baby formula has been sealed. The boy died last Saturday after drinking the formula. His twin sister was hospitalized but survived. The company’s shares fell 25% on the news, but have since regained half that in New York trading.
Product safety scandals just won’t go away. Last month, Mengniu Dairy said it destroyed dairy products found to have contained a cancer-causing fungi. The dairy industry is still under the long shadow caused by the 2008 melamine-laced powdered baby milk scandal in which at least six children died and nearly 300,000 fell ill.