New Zealand Prime Minister Helen Clark has accused Chinese officials of turning a blind eye to the sale of chemically-tainted milk powder that has killed two children and left nearly 500 more ill, the Financial Times reported. Chinese company Sanlu was ordered to halt production and issue a general recall last Thursday after investigators found the chemical melamine in the milk powder. The chemical – which was also found last year in pet food shipped from China to the US – is said to be responsible for causing kidney stones in children. However, the CEO of New Zealand dairy firm Fonterra, which has a 43% stake in Sanlu and seats on the company’s board, said directors were first informed of the contamination as early as August 2. "I think the first inclination was to try and put a towel over it and deal with it without an official recall," Clark said. Chinese police have arrested two people on suspicion of contaminating the products.