Retailer Edinburgh Woollen Mill (EWM) has hit back at claims by the BBC that wages paid to some of the North Korean workers making its garments in Mongolia make their way to the North Korean government.

According to a Newsnight documentary aired last week, cashmere jumpers sold by the retailer under the James Pringle brand name are labelled "Designed in Scotland" but are produced in an Eermel factory in Mongolia, where 80 of the employees are from North Korea.

The programme further questions whether the wages paid to the workers are wholly or partly paid over to the North Korean government.

But in a statement mailed to just-style today (20 October), Edinburgh Woollen Mill says the allegations are sensationalist, "unfair, unbalanced and unrepresentative of the full truth." Instead, it stresses that it is committed to its corporate responsibilities in the UK and overseas.

The retailer is one of the UK's largest high street chains with more than 300 stores selling clothing for men and women. For its cashmere products it uses raw cashmere sourced and spun in Mongolia, and has been working with the Eermel factory there for about five years.

It points out that not only has this relationship created a ready market for the cashmere farmers, but that it also provides employment for both native Mongolians and the North Koreans who work in the factory and make up around 10% of its workforce.

"We believe that everyone involved in this project has benefited," the statement said. "The factory and the workforce have benefited from the input and skills from Scotland and there is no doubt in our mind that this has improved the lives of the local people."

In response to claims the foreign workers' wages help prop up the regime in North Korea, EWH says the workers are free to leave the factory and all of their wages are paid into personal bank accounts with the State Bank of Mongolia.

"We understand that they have debit cards and freely spend from their bank accounts. There is a Mongolian tax deduction of 10%, this is the only deduction made," it adds.

"We made the BBC aware that the factory owners had provided us with proof of the individual bank accounts of the North Korean workers and confirmation that the wages were paid by the factory to these accounts with the State Bank of Mongolia and not in any way to the North Korean government."

It also says the factory owner has categorically denied that any payments are made to the North Korean government or any agencies linked to it.

As far as the labelling of the products is concerned, describing the made-in-Mongolia  garments as 'Designed in Scotland' is factually correct, Edinburgh Woollen Mill says.

"The garments are designed by our experienced team at our head office in the Scottish Borders.

"Our factories are provided with clear design, colour, quality and technical specification from our teams in Scotland in order that a quality garment can be produced by the factory in Mongolia and supplied to our customers at a very keen price."