Wal-Mart Probes Whether India Company Misrepresented Cotton Sheets

NEW DELHI—Wal-Mart Stores Inc. said Tuesday that it is reviewing supplies from Welspun India Ltd., days after Target Corp. severed ties with the Indian textile maker alleging that the company billed sheets it sold as made with Egyptian cotton when they weren't.

Wal-Mart said it is investigating whether Welspun sold it cheaper cotton sheets while passing them off as superior products.

"We are currently reviewing Welspun cotton certification records and plan to have additional conversations with Welspun," the U.S. retailer said. "If we discover an issue, we will handle it appropriately," the company added, without elaborating.

Welspun didn't immediately respond to a request for comment. Trading in the company was suspended on Tuesday after the stock fell 20%, the daily limit, for a second-straight day.

Welspun said Saturday that it had engaged an accounting firm to review its supply chain after Target made the allegations.

American retailers such as Target, Wal-Mart, Bed Bath & Beyond Inc., J.C. Penney Co. and Macy's Inc., accounted for two-thirds of Welspun's $878 million in sales in the year ended March 31. Welspun is one of Asia's biggest textile manufacturers.

(END) Dow Jones Newswires

August 23, 2016 04:15 ET (08:15 GMT)

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