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A Shanghai leather factory owned by Mainzeal's parent company Richina was previously sanctioned for violating Shanghai's air pollution rules.
Richina was founded in 1995 by Richard Yan, the sole director of Mainzeal, which put itself into receivership this week.
Richina bought Mainzeal in 1995, along with a New Zealand leather company Mair Astley, later adding a Chinese leather company to its assets.
That plant in Shanghai – the Richina Leather factory – has been the source of considerable pollution issues for locals in the Jufengyuan neighbourhood in the city's north-east, about 2km from the factory.
According to a report by China Dialogue in 2010, Richina was sanctioned annually from 2004-08 for air pollution breaches.
In 2008 alone, it was prosecuted for turning off air-treatment equipment and fined about $US15,000 for violating standards on the release of atmospheric pollutants.
Locals complained about the putrid odours being emitted from the plant, which supplies tanned leather to some of the world's largest shoe, clothing, furnishing and car brands such as Toyota and Nike.
Richina ceo Bob Moore claimed to know nothing about the odour, saying it was coming from other chemical plants.