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Rumors of the actress getting fired had sparked after a line designed by her had come under fire from fashion critics.
Also, the Parisian fashion house was hit with rumors of infighting and reports had come that chairman Asim Abdullah wanted CEO Mounir Moufarrige to drop the actress.
However, a spokesperson for Abdullah has clarified that the stories are false.
"Such an insinuation is totally absurd," the Daily Express quoted the rep as telling New York Post.
The rep added that Lohan would continue with the label.
Women's Wear Daily had called the collection "an embarrassment."
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