The Italian fashion house Loro Piana, part of the French luxury conglomerate LVMH, has been placed under judicial supervision on charges of facilitating the exploitation of workers by subcontractors, according to the police and a company source, AFP reported.

In an official statement, the Italian Labour Protection Authority confirmed that it had "executed a court order for judicial administration issued by the Milan court" against a company operating in the high fashion sector.

A source from Loro Piana, known for its cashmere production, confirmed that legal proceedings are underway against the company, but it has not issued an official comment.

According to the police, the company was found to be "unable to prevent or limit labour exploitation within its production process, having failed to implement adequate measures to verify the actual working conditions or the technical capacity of its subcontractors."

The investigation found that Loro Piana had outsourced the production of garments, including cashmere jackets, to a company without its own manufacturing facilities. That company subcontracted the work to another firm, which in turn used workshops with Chinese workers in an effort to cut costs.

In these workshops, unregistered workers were exploited under conditions that did not meet health and safety standards – particularly regarding pay, working hours, rest periods, and leave, investigators reported.

The Milan court ruled that Loro Piana had "negligently facilitated" the exploitation, the police statement added.

The investigation began in May following a report from a Chinese worker who claimed he was beaten by his employer after requesting unpaid wages.

Police conducted inspections of workshops run by Chinese nationals in the Milan area, where they discovered labour law violations, including illegally built dormitories and unhygienic conditions.

Charges have been brought against two Chinese nationals – owners of the workshops – as well as two Italians for violations of health and safety regulations. In addition, seven workers without residency permits were identified.

The court imposed fines totaling more than €181,000 and administrative sanctions amounting to approximately €60,000.

Operations at two Chinese workshops were suspended "due to serious safety violations and the use of undeclared labour," the police added.

Loro Piana was acquired by LVMH in 2013 and is currently managed by Frédéric Arnault, son of LVMH chairman Bernard Arnault.

The company declined to comment on the judicial proceedings in Milan.

The Italian judicial system has previously taken similar action against other fashion brands, including Armani.

In May, the Italian antitrust authority cleared another LVMH group brand – Dior – of liability regarding labour conditions, but imposed a €2 million fine to benefit "victims of exploitation." | BGNES