This article first appeared in The Edge Financial Daily on July 11, 2018

KUALA LUMPUR: Top Glove Corp Bhd and its wholly-owned subsidiary Top Care Sdn Bhd initiated arbitration proceedings against Adventa Capital Pte Ltd in Singapore yesterday, claiming RM714.86 million in damages and losses suffered.

This follows the allegedly fraudulent misrepresentation made by Adventa Capital to induce Top Glove and Top Care into entering a share purchase agreement in April.

Top Glove, the world’s largest manufacturer of gloves, was replying to a Bursa Malaysia query yesterday. Top Glove is alleging that Aspion Sdn Bhd directors Low Chin Guan and Wong Chin Toh were in a conspiracy to defraud the group by tricking it into acquiring Aspion from its former parent Adventa Capital for RM1.37 billion earlier this year.

Top Glove said it is currently seeking legal advice as to Low’s position as a director of Top Glove. Low, 58, assumed his current post on April 4. Prior to that, he was leading Adventa Group.

Top Glove said it is also engaging with the auditors of Aspion to assess if there is any effect on the audited financial statements of financial year 2016 (FY16). “If there is any effect, it will be reflected in the FY17 audited financial statements as an adjustment to the comparatives and opening balances as applicable,” it added.

At this juncture, Top Glove said it is unable to determine the financial impact on the group as the exercise of the purchase price allocation to establish the amount of goodwill is ongoing.

“In addition, management is also in the process of reassessing the profit and cash flow projections of Aspion in view of the latest development. The group endeavours to incorporate the financial impact, if any, in the coming fourth-quarter financial results ending Aug 31, 2018,” it added.

Nevertheless, Top Glove said that at this juncture, it intends to proceed with the proposed one-for-one bonus issue and the proposed issuance of guaranteed exchangeable bonds with an aggregate principal amount of up to US$300 million (RM1.2 billion) announced on April 20.