A senior executive with the dairy producer Mengniu has said the company will cooperate with a police investigation into alleged libelous remarks made by staff at Mengniu about an industry peer.

Hu Sudong, vice president of Mengniu, said that An Yong, arrested as one of the suspects, was a project manager of Mengniu, but he should be liable for the situation personally.

An, a manager in Mengniu's milk department, was arrested together with several public relations consultants hired by the Hohhot-based company on suspicion of making libelous online posts about a rival company.

Mengniu claimed that An was the only member of staff arrested from the company and denied it was behind the alleged plot.

Mengniu's rival Yili Group issued a statement on Wednesday that posts published on Sina.com in July were aimed at defaming its new baby formula, which contains fish oil.

But the accusations - that the baby formula was causing premature puberty in infants - missed the intended target and instead affected another producer of the formula, according to Synutra International.

Synutra said in a statement yesterday that it was shocked by the latest revelations about the incident and ensured customers that all of its products are completely safe.