State-owned food conglomerate Cofco is playing a more active role in China Mengniu Dairy, and has raised its stake after an excessive amount of a carcinogenic substance was found in its dairy products last month.
The mainland's largest grain trader has reportedly been participating in Mengniu's daily operations, including quality control, despite having said it would not do so when it became a shareholder four years ago.
In addition, Cofco increased its equity to 28.09 per cent from 27.96 per cent after buying 220 million shares for HK$41.12 million last Friday, according to its filing with the Hong Kong stock exchange.
The move is seen as a vote of confidence in Inner Mongolia-based Mengniu, which was among the dairy firms involved in the melamine milk contamination scandal in 2008.