An Italian subsidiary of French luxury giant LVMH that makes Dior-branded handbags was placed under court administration on Monday after a probe alleged it had subcontracted work to Chinese-owned firms that mistreated workers.

This is the third such decision this year by the Milan court in charge of preemptive measures, which in April named a commissioner to run a company owned by Giorgio Armani due to accusations the fashion group was "culpably failing" to adequately oversee its suppliers. Armani Group said at the time it had always sought to "minimize abuses in the supply chain."

According to a copy of the Monday decision, the court said that prosecutors alleged that the violation of rules was not a one-off among fashion companies with manufacturing capacity in Italy, but systematic due to the need to pursue higher profits.