MILAN — A Milan court rejected prosecutors’ request to place Paul & Shark’s parent Dama SpA and Aspesi’s Alberto Aspesi & C. SpA under judicial administration for their alleged negligence in auditing their suppliers.

Judge Roberto Crepaldi ruled against the prosecutors’ move, arguing that the legal grounds for the requested measure were not met as there is no proof that  Paul & Shark’s chief executive officer Andrea Dini and Aspesi’s board member Francesco Umile Chiappetta acted “in concert” in committing the offense.

The development comes as part of a labor abuse case filed earlier this month by Milan prosecutors Daniela Bartolucci and Paolo Storari, who reportedly found that both companies subcontracted part of their manufacturing to Chinese-owned firms Gmax 365 Srl and M&G Confezioni Srl. Both are based in Garbagnate Milanese, in the Milan suburbs, and allegedly exploited their workers in reportedly underpaid, 14-hour work shifts.

Crepaldi attributed the full responsibility to  the manufacturing companies, whose owners are under investigation.

Over the past two years supply chain scandals have rocked the luxury fashion industry in Italy, shaking both its reputation and business practices.

Investigations by a Milan court that uncovered ties of luxury brands such as Tod’s, Loro Piana, Valentino, Dior and Giorgio Armani, among others, to subcontractors allegedly involved in sweatshop schemes have raised concerns about the industry’s ability to manage its supply chains effectively.

All the above brands have been put under judicial administration to correct and enhance audits and oversight through court-mandated procedures, with the exception of Tod’s, which obtained that the judicial administration procedure be handled by an Ancona, Italy court, which has yet to rule.

Simultaneously, the maker of Gommino loafers and three of its managers are being investigated by prosecutors over suspected labor abuses and accused of allegedly ignoring the findings of inspections by local authorities into the company’s subcontractors.

Dior’s and Giorgio Armani’s probes have been fully resolved and the judicial oversight has been lifted.

Meanwhile, last fall some 13 fashion companies fell under the scrutiny of the same Milan prosecutors and were asked to provide documents on governance and supply chain audits for preliminary probes.

The names involved included Prada, Versace, Gucci, Dolce & Gabbana, Ferragamo, Missoni, Givenchy Italia, Yves Saint Laurent Manifatture, Alexander McQueen Italia, Adidas Italy, Off-White Operating, Coccinelle and Pinko. None of these have been put under judicial administration.