RUMOURS have been rife about New Zealand dairy giant Fonterra selling its stake in the Chinese company involved in the milk contamination scandal.
It is believed Fonterra has denied any sale of its 43 per cent share in San Lu, one of 22 companies to produce milk powder containing melamine.
There were reports which talked about an auction and a meeting with government officials to take over various aspects of the company.
China's Ministry of Industry and Information Technology was believed to have met with five Chinese dairy producers in Beijing at the end of last week on matters related to a potential merger with the San Lu group.
Fonterra has said talks with San Lu were focusing on all facets of its Chinese operations, but there were no finalised plans for the future.
Last month Fonterra wrote down the value of its San Lu stake by 69 per cent, or $NZ139 million ($A122 million), because of damage to the company's brand.
The poisoned milk powder has reportedly killed four babies and caused illness in 53,000 children, with many products pulled from the shelves.
