Wednesday, April 14, 2010

Citibank (NYSE:C) Backed Chinese Dairy Fails

A Chinese dairy backed by Citibank (NYSE:C), Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and the Royal Bank of Scotland, among others, has collapsed, as it will not be able to pay off its creditors and will be liquidated.

Taizinai, the company in question, was at one time prepared to go public before the tainted milk scandal in China caused the overall Chinese milk industry to be suspect, even though Taizinai wasn't included among the companies which produced the tainted milk.

Even so, the government in Hunan took over the operations of Taizinai, and the very predictable results leading to the failure of the company are now a reality.

The debt owed by the company comes to $439 million. While the holding company is being liquidated, the subsidiary located in China is continuing its operations.

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