Police say Zhang Yujun, 40, ran a workshop on the outskirts of Jinan in eastern Shandong province that manufactured and sold a "protein powder" composed mainly of melamine and malt dextrin, the official Xinhua News Agency reported. The powder was added to watered-down milk to make it appear higher in protein content.
Prosecutors in the Shijiazhuang Intermediate People's Court accused Zhang of producing 776 tons of the additive powder from October 2007 through August 2008, making it the largest source of melamine in the country. He allegedly sold more than 600 tons with a total value of 6.83 million yuan ($1 million), the court heard.
In the same case, a second man, Zhang Yanzhang, 24, was accused of buying and reselling 230 tons of powder to others.
State television showed both men in court in handcuffs with their heads bowed while being questioned by three judges.
An official at the publicity office of Hebei Supreme Court confirmed that the trial started Friday but refused to give his name or other details.
Four other men were being tried in three separate courts across Hebei province for adding the chemical to raw milk and then selling it to Sanlu Group Co., the main company in the scandal, according to Xinhua.
Melamine can artificially inflate protein levels and was apparently added to watered-down milk to fool quality inspectors while boosting profits.
Zhang Heshe and Zhang Taizhen were accused of adding 77 pounds (35 kilograms) of the "protein powder" to 70 tons of raw milk and then selling it to Sanlu. Yang Jingmin and Gu Guoping were also charged with adding 53 pounds (24 kilograms) and 37 pounds (16.7 kilograms) of melamine, respectively.
The verdicts will be announced at an unspecified date, Xinhua reported.
The dairy company Sanlu, based in Shijiazhuang, confirmed earlier this week that it was bankrupt.
Xinhua reported Thursday that Sanlu has 1.1 billion yuan ($160 million) of net debt and that a branch of the Shijiazhuang City Commercial Bank was the creditor that applied to a court to have Sanlu declared bankrupt.
It said the intermediate court in Shijiazhuang had accepted the filing. Xinhua said Sanlu owes a creditor 902 million yuan ($132 million) it borrowed earlier this month to pay for the medical treatment of children sickened after drinking the company's infant formula and for compensation of the babies' families.
Wang Jianguo, spokesman for the Shijiazhuang city government, said the money was given to the China Dairy Industry Association for medical care and compensation fees for victims, according to a transcript of a news conference he gave Thursday.
A woman who answered the phone Friday at the association refused to answer any questions.
The issue of compensation for the families of the children sickened or killed has become a sensitive one, with courts so far not accepting any lawsuits filed by the families.
The Legal Daily newspaper reported that Tian Wenhua, Sanlu's chairwoman and general manager, would go on trial Wednesday in Shijiazhuang for "selling fake and shoddy products."
Sanlu, like a number of major Chinese dairies, had been exempt from government inspections because it was deemed to have superior quality controls - until high levels of the industrial chemical melamine were found in its baby formula and other products in September. Several other dairies were also found to have sold tainted goods.
Melamine poses little danger in small amounts, but larger doses can cause kidney stones and renal failure.
Sanlu is 43 percent-owned by New Zealand daily cooperative Fonterra Group.