China Daily reported Monday two companies in the Ningxia Hui area were closed Saturday for selling tainted milk powder, while candies made with tainted milk powder were found in Jilin province Sunday.
Ningxia's regional government said the two companies responsible are the Ningxia Tiantian Dairy Co Ltd. and Ningxia Panda Dairy Co Ltd.
Police investigators discovered a third-party dairy paid Ningxia Tiantian Dairy about 170 tons of milk powder as a debt payment last July -- melamine-tainted product that should have been destroyed, China Daily said.
Ningxia Tiantian Dairy repackaged 164.75 tons of the tainted milk power, reselling it to five factories in Fujian, Guangdong and Inner Mongolia, police say.
The Ningxia Panda Dairy Co Ltd did not have similar problems because it had been shut down for selling tainted milk last year.
Zheng Xiaoming, vice-governor of Shaanxi, said starting Wednesday any officials responsible for tainted milk found in the latest crackdown will have to step down.
"The officials will be removed immediately from their posts once tainted milk products are found, before we start investigating the case," Zheng said.