KUALA LUMPUR (July 16): Top Glove Corp Bhd confirmed today the US Customs and Border Protection (CBP) had yesterday placed a detention order on disposable gloves manufactured by two of the rubber glove manufacturer's subsidiaries, namely Top Glove Sdn Bhd and TG Medical Sdn Bhd.
In a statement to Bursa Malaysia today, Top Glove said it is reaching out to the CBP through the glove producer's office in the US besides the company's customers and consultants, to understand the issue better and work towards a speedy resolution to the matter within an estimated two weeks.
"There is a possibility this may be related to foreign labour issues, which we have already resolved, save for one more issue with regard to retrospective payment of recruitment fees by our workers to agents prior to January 2019, without our knowledge. However, Top Glove has already been bearing all recruitment fees since January 2019 when our zero recruitment fee policy was implemented.
"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.
"We believe it is in the best interests of all parties to come to a solution expeditiously so that our disposable gloves can reach the parties that need [them] the most, during this Covid-19 (pandemic) time," Top Glove said.
The company said it will provide updates when there are further developments on the matter.
In a separate statement, Top Glove said its share trade on Bursa has been halted between 2:30pm and 3:30pm today in conjunction with the announcement.
"Accordingly, trading in structured warrants relating to TOPGLOV has also been halted at the same time," Top Glove said.
At Bursa's 12:30pm break today, Top Glove's share price settled down 56 sen or 2.57% at RM21.24 for a market capitalisation of RM60.74 billion.
The stock saw some 26 million shares traded.
The North America region, comprising Canada and the US, accounted for the largest share or 27% of Top Glove's sales volume during financial year ended Aug 31, 2019 (FY19), according to the company's latest annual report.
For FY19, Top Glove said its rubber glove sales volume in North America rose 20.3% from a year earlier although the quantity sold was not specified.
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