(CNN) -- New Zealand-based Fonterra, which supplies milk powder to a Chinese company caught up in the latest milk scandal, said Wednesday it "remains 100 percent confident about the quality of its products."
China's Health Ministry launched an investigation in Hubei province after claims that milk powder has led to premature sexual development among infant girls.
Samples of milk powder made by Qingdao-based Synutra International were being tested, Health Ministry spokesman Deng Haihua said at a news conference Tuesday, according to state-run Xinhua news agency.
At least three infant girls had grown breasts prematurely, Xinhua reported.
Deng said a medical investigation was under way and a wide range of factors could lead to premature sexual development, according to Xinhua.
The deputy head of Wuhan Children's Hospital's endocrine department said three of the four children treated for the condition had never eaten baby formula made by Synutra, Xinhua reported.
A fourth baby had used Synutra formula but then switched brands, Xinhua cited him as saying.
On Monday, Synutra Chairman and CEO Liang Zhang in a statement called media reports "highly irresponsible and based on speculation instead of evidence."
He said that the company was working with state authorities, including the Dairy Association of China and the Office of Food Safety, to test product samples.
"We do not add hormones to our products and we have invested heavily in research, quality control, formulations and ingredients," the statement on the company's web site said.
Liang added that the company was "in the process of taking legal action to protect our brand."
The company's stock, which is listed on Nasdaq, shed more than a fourth on Monday, according to Xinhua.
Fonterra noted that while it supplied milk powder to Synutra, the latter also sourced milk locally and imported whey powder from Europe.
Estrogen hormones are banned in milk powder products, Deng said.
The case is the latest to hit China's dairy industry. In 2008, a tainted milk powder scandal involving melamine left six babies dead and sickened 290,000 in China's Hebei province.
The company at the center of it -- Sanlu Group -- filed for bankruptcy. Fonterra owned a 43 percent stake in it.