Pakistan mills call ‘fraud’ in Dan River case 

Home Textiles Today Staff -- Kids Today, 4/30/2008 1:15:00 PM

Karachi, Pakistan – With an estimated $30 million in Pakistani textiles hung up by the Dan River bankruptcy, a group of the country’s mills has retained lawyers to explore lawsuits against Dan River and Indian parent company GHCL, possibly in both the United States and India.

Approximately 24 Pakistani exporters from Karachi and Faisalabad are owned money by Dan River, according to a press release from the Towel Manufacturer’s Association (TMA) of Pakistan. The group is appealing to the government of Pakistan to take up the issue with the Pakistan High Commission in Delhi and the Indian High Commission in Islamabad.

Approximately $10 million in merchandise is sitting at U.S. ports accruing demurrage, or carrying charges for holding currency, according to the TMA. Another $10 million of product is in the pipeline, and an additional $10 million in payments is already owed to exporters in Pakistan, the association said.

Complicating the issue, goods sold through other GCHL entities – Baker and Best Manufacturing in the United States, which handle institutional business; and the Roseby’s home textiles chain in the U.K. – were invoiced as Dan River, according to S.M. Obaid, chairman of the TMA export sub-committee and owner of textiles manufacturer Toweller’s Ltd.

“We feel this is a clear-cut case of fraud and we are trying to prove it through legal means,” Obaid told Home Textiles Today.