The world’s largest products for making rubber gloves were banned by the United States on the grounds of forced and forced labor, Reuters said.
Top Glove Corporation’s plan to include Hong Kong and raise up to $ 1 billion has been delayed as the world’s largest rubber glove maker seeks to resolve a ban on importing its products into the United States, according to said sources with direct knowledge of the matter.
The Malaysian company, which is already listed on Kuala Lumpur and Singapore, said in late April that it would sell 793.5 million shares in the listing, half of what the company proposed in its application to the Hong Kong Stock Exchange in February.
However, the deal has stalled as the company awaits U.S. Customs and Border Protection (CBP) indications as to whether the ban on imports would be lifted soon, sources told Reuters.
Potential investors questioned Top Glove and its advisers about sanctions during preliminary pre-listing briefings, they said.
Top Glove expected to complete the listing by the end of the second quarter in 2021, according to sources.
Top Glove did not respond to any comments. The sources could not be named, as the information was not yet made public.
The U.S. Customs and Border Protection (CBP) banned the import of Top Glove products last year, saying it had found reasonable evidence indicating forced labor practices at the company’s production facilities in Malaysia.
Customs said in March that they had found evidence of multiple indicators of forced labor in the Top Glove production process, including debt bondage, excessive overtime, abusive working and living conditions, and withholding of identity documents. , and directed its officials to confiscate goods from the manufacturer.
According to its latest accounts, the US market accounts for 22% of Top Glove’s total sales volume.
Analysts had kept the company’s earnings forecasts intact and said diverting trade to other markets could cushion the impact of the loss in sales in the U.S. market as the pandemic continued.
CBP, in an email response to Reuters, said the length of the review process varies depending on the individual facts and circumstances of each case.
“CBP will not modify or revoke a forced labor finding until it has information that all of the forced labor indicators identified by the agency have been completely remedied and it is demonstrated that forced labor is no longer used to produce the target goods. “, he said. .
Top Glove said in April that it had resolved all indicators of forced labor in its operations and that this had been verified by London-based ethical trading consultant Impactt Limited.
The company has said the listing in Hong Kong is not urgent as it has 2.36 million ringgit revenue ($ 573.09 million) on its balance sheet, sources said.
Instead, a share price is being pursued to diversify the firm’s shareholder base and take advantage of the increased liquidity in the Hong Kong markets compared to Kuala Lumpur and Singapore, one source added.