Welspun India shares continue to fall by 20% after Target Corp cuts ties
Nearly, 44,34,130 shares were sold from the investors.
Textile major Welspun India's shares continued to plunge for asecond day after the Minneapolis-based Target Corporation decided to terminate its relationship with the company.
At 0937 hours the shares of Welspun India were trading at Rs 65.85 per piece, down 19.99%, or Rs 16.45.
Again, the shares of the company had no buyers during early trade. Nearly, 44,34,130 shares were sold from the investors. On Monday, the number of shares sold were 1,03,75,459.
Target side of the story:
One of Target’s vendors, Welspun Global Brands (Welspun), was one of the producers of Egyptian Cotton 500-thread count sheets under the Fieldcrest label for Target, the US company said in a press release.
As per the release after an extensive investigation by Target, they confirmed that Welspun had substituted another type of non-Egyptian cotton when producing these sheets between August 2014 and July 2016.
"Neither Target nor Fieldcrest had any knowledge of this substitution.This was a clear violation of both Target’s Code of Conduct and our Standards of Vendor Engagement, and was contrary to the high ethical standards to which we hold ourselves, and our vendors", Target said.
Following this, Target pulled back all the products from its stores and web portal. The company also offered full refund to the customers who'd bought the sheets between August 2014 and July 2016.
The company informed Welspun that because of the misconduct found during the investigation, Target was in the process of terminating their relationship.
Welspun's side of story
On Saturday, without naming Target Corp, Welspun India in its regulatory filing informed BSE that the company "refers to a product specification issue with one client program".
"We have initiated immediate actions to investigate the root cause. We are appointing an external auditor (one of the Big Four) to audit our supply systems and processes. This is an issue of highest priority for us and we will take all necessary steps to address it. We have an impeccable record of supplying quality products to our customers globally to over two decades. We reiterate our commitment to the highest standards of customer service and compliance", the company said.