In a latest setback for the supplier, two class action lawsuits have been filed against Welspun India Ltd. The lawsuits allege the company fraudulently labeled its bed sheets and towels as premium Egyptian cotton while the contents were not. It may be recalled that the supplier came into the bad books of recently.
Welspun committed a ‘widespread fraud’ in which ‘consumers who have purchased Welspun bed linens have overpaid for an inferior product,’ a plaintiff alleged in an August 29 lawsuit filed in a New York federal court. The suit was filed by Hagens Berman Sobol Shapiro LLP, a consumer-rights action law firm.
However, a Welspun spokesperson declined to comment on the lawsuits. Welspun's stock fell 2.2 per cent to Rs 56.60 in Mumbai yesterday.
The controversy over Mumbai-based Welspun has been getting large since Target said it's stopping business with the vendor after discovering sheets and pillowcases that were made with cheaper fibers were mislabeled as Egyptian cotton for two years.
