Welspun gets U.S. court nod to settle claims

Aggregate settlement cap at $36 mn

AHMEDABAD :ANJAR : GUJARAT : 24/05/2015. Workers busy in their work at Welspun Textile spinning mill at Anjar Kutch on 23rd May 2015., Welspun India Limited (WIL), part of the Welspun Group its new spinning facility at Anjar, Gujarat - the largest under one roof in India. This new, world-class fully automated facility at Welspun City, a 2,500 acre township set up in the heart of Anjar. As a US$ 3 billion company, Welspun Group is one of India’s fastest growing conglomerates, registered at a CAGR of 30% over the last decade.In the Line Pipe sector, Welspun has to its credit some of the most prestigious projects including the world’s deepest pipeline project in the Gulf of Mexico, U.S.A; heaviest pipeline project in the Persian Gulf; highest LNG pipeline project in Peru and longest pipeline project from Canada to the US. While in the Home Textiles sector, Welspun is the largest integrated towel manufacturer in Asia, a leading supplier to 14 of the top 30 US retailers, and a global supplier offering the entire range of products within the segment Welspun’s manufacturing base sits in its core facilities at Anjar, Gujarat, while other units are diversified in different parts of India with one plant each in USA and Saudi Arabia. Photo : Vijay Soneji.

Welspun India Ltd. has received preliminary U.S. court approval for a settlement agreement to resolve all pending legal claims made against the company in the United States.

These claims concern the past marketing and labelling of its premium cotton home textile products, the company said in a statement.

In 2016, U.S. retail major Target Corporation terminated the product sourcing contract with the company following allegations of supply of products made of inferior cotton as against Egyptian cotton which was promised in the contract. After that, several class action suits were filed in U.S. courts, claiming damages.

“The plaintiffs in other pending litigations involving these issues have also agreed to withdraw their objection to the global settlement and suspended litigation pending the settlement agreement’s final approval,” it said. The firm has also, inter alia, agreed to increase payouts to individual settlement class members without increasing the aggregate settlement cap of $36 million. “Based on expert advice, the provision already made by the company during the quarter ended March 31 remains unchanged and adequate. As per statutory procedure, the settlement agreement is subject to final approval and review by the appropriate courts in USA,” the company said in the statement.

It said over the last three years, the company had addressed the issue by aggressively undertaking various steps to enhance traceability, including the introduction of Wel-Trak, a patented and industry-defining solution, ‘which had helped it us earn stronger trust among customers.’ It also and reiterated the firm’s its commitment towards prioritising customer interest above all.

“We have also increased additional third party assurances, such as vendor audits, and deployed a dedicated resource in Egypt to source Egyptian cotton,” it said.

“With this, Welspun is well equipped to further consolidate its leadership position in the industry and leverage global opportunities in flooring and advanced textiles, as well as the growth of its domestic home textiles business,” it added.