Malaysia’s Top Glove loses RM3.2b in market value amid US detention order
(Malay Mail) – Top Glove Corporation Bhd’s shares declined to a low of RM19.70 today, wiping out RM3.2 billion or about 10 per cent of its market value due to a US detention order on the group’s gloves.
Its market capitalisation now stands at RM57.29 billion.
Overall, about 26.7 million shares were traded before trading in the shares on Bursa Malaysia Securities was halted.
Trading in the shares and warrants of Top Glove was halted with effect from 2.30pm for the announcement on the US’ move and was scheduled to resume at 3.30pm. However, trading across the stock exchange stopped for the rest of the day from 3.30pm onwards due to a technical issue.
Top Glove today confirmed that the US Customs and Border Protection (CBP) has placed a detention order effective yesterday on disposable gloves manufactured by two of its subsidiaries, Top Glove Sdn Bhd and TG Medical Sdn Bhd.
“We are reaching out to the CBP through our office in the US, customers and consultants to understand the issue better and work towards a speedy resolution of the issue,” it said in a filing with Bursa Malaysia.
The glove maker said this might be related to foreign labour issues. It said it had already resolved all issues save for one with regard to retrospective payment of recruitment fees by its workers to agents prior to January 2019 without the company’s knowledge.
“However, Top Glove has already been bearing all recruitment fees since January 2019 when our Zero Recruitment Fee Policy was implemented,” it said.
Top Glove said it was in the best interest of all parties to come to a solution expeditiously so that the consignments could reach the parties that urgently needed the gloves in the face of Covid-19.
“Over the past few months we have been working on this issue, which involves extensive tracing, to establish the correct amount to be paid back to our workers on behalf of the previous agents.
“We estimate the total amount to be about RM20 million to RM50 million,” it added.