Documents Tie German Company to Chinese Subsidiary That Produced Defective Drywall

Knauf Gips, a family-owned German company with operations throughout the world, has argued for almost two years that it is not legally responsible for the millions of pounds of defective drywall that one of its subsidiaries in China has admitted exporting to the United States.

But documents filed in Germany and in U.S. courts show that Knauf’s German umbrella company is closely involved in the management of its subsidiaries, including overseeing quality control, finding raw materials and dealing with rising concerns over the defective drywall.