The People's Court of Xuhui District of Shanghai has rejected a claim for compensation of 1 million yuan ($162,000) filed by a bakery chain against a university student, according to a local news portal, eastday.

Writing under the user name Mu Xin on the social networking site Renren, the student claimed that milk cream products supplied to the bakery chain Christine International Holdings contained illegal cooking oil.

In response, the company filed a lawsuit for defamation and asked for 1 million yuan in compensation. Christine said the allegation resulted in a drop in profits of more than 9 million yuan and a decline in its share price.

The student, who made the claims on April 25, 2012, wasn't named to protect her identity

On Friday, the court said the allegations were groundless but not malicious and that food producers should be prepared to accept questions and criticism from consumers.

The court added that the information could only be seen by close friends of the defendant, and therefore, the impact was extremely limited.

However, the court criticized the student and warned her about malpractice.