Extra police have been deployed around Sanlu's headquarters and the city's main children's hospital.

ECONOMIST: China��s baby-milk scandal: Formula for disaster | The

Moreover, Fonterra was not a controlling shareholder and consequently could not be held responsible for Sanlu's conduct.

ECONOMIST: Product liability in China: Redress by relocation | The

Testing by Sanlu found tripolycyanamide, also known as melamine, in 700 tons of its product, the news agency reported.

CNN: China: Hundreds of babies fed tainted milk

Sanlu would not say whether its own employees are being investigated, Xinhua said.

CNN: China: Hundreds of babies fed tainted milk

Fonterra says it was told by Sanlu of a problem with the powder on August 2nd, six days before the games.

ECONOMIST: China��s baby-milk scandal: Formula for disaster | The

On September 8th it told them what it had learnt from Fonterra, a New Zealand dairy company that owns 43% of Sanlu.

ECONOMIST: The politics of an unconscionable delay

Zhao told the news agency that the suspects added water to the milk they sold to Sanlu to make more money, then added the chemical so the diluted milk could still meet standards.

CNN: China: Hundreds of babies fed tainted milk

Sanlu's production has been halted.

ECONOMIST: The politics of an unconscionable delay