Malaysia’s top glove listing in Hong Kong postponed due to US ban: Report | Business and Economic News

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According to Reuters, the world’s largest rubber glove manufacturer’s products have been banned by the United States for fear of forced labor and bonded labor.

People familiar with the matter said that the top glove company’s plan to go public in Hong Kong and raise up to $1 billion has been postponed because the world’s largest rubber glove manufacturer seeks to resolve the US import ban on its products.

The Malaysian company, which is already listed in Kuala Lumpur and Singapore, said in late April that it would sell 793.5 million shares at the time of listing, which is half of the company’s application to the Hong Kong Stock Exchange in February.

However, the source told Reuters that the transaction has stalled as the company is waiting for instructions from the US Customs and Border Protection (CBP) on whether the import ban will be lifted soon.

They stated that potential investors questioned top gloves and their advisers on the sanctions issue at the preliminary briefing before the listing.

According to sources, the top gloves had hoped to complete the listing by the end of the second quarter of 2021.

Top Glove did not respond to a request for comment. Since the information is not yet public, the source of the information cannot be disclosed.

Forced labor

The U.S. Customs and Border Protection (CBP) banned the import of top glove products last year, saying that it had found reasonable evidence of forced labor practices at the company’s production facilities in Malaysia.

The customs stated in March that it had found evidence of multiple forced labor indicators in the production of Top Glove, including debt bondage, excessive overtime, poor working and living conditions, and detention of identity documents, and instructed its officials to confiscate the goods from the manufacturer .

According to its latest accounts, the North American market accounts for 22% of the total sales of top gloves.

Analysts basically kept their earnings forecasts for the company unchanged, and said that as the pandemic continues, moving trade to other markets can cushion the impact of lost sales in the US market.

In an email response to Reuters, CBP stated that the length of the review process varies with the specific facts and circumstances of each case.

“CBP will not modify or revoke the results of the forced labor investigation until it has information that all the forced labor indicators determined by the agency have been completely corrected and it is proven that forced labor is no longer used to produce the target goods,” it said.

Top Glove stated in April that it had resolved all forced labor indicators in its operations, and this has been verified by Impactt Limited, an ethical trade consultant in London.

According to sources, the company said that listing in Hong Kong is not urgent because it has 2.36 billion ringgits ($573.09 million) in cash on its balance sheet.

One of the sources added that, on the contrary, compared with Kuala Lumpur and Singapore, the company is seeking a listing to diversify the company’s shareholder base and take advantage of the increased liquidity in the Hong Kong market.



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