Top Glove Corp’s stock yesterday sank after the US Customs and Border Protection (CBP) ordered personnel at US ports of entry to seize its gloves made in Malaysia, putting pressure on the world’s biggest glove maker to improve its labor practices.
The company’s shares tumbled as much as 5 percent in Kuala Lumpur to the lowest level since March 3. It is down 21 percent this year, among the largest decliners on the main equities gauge. Its stock listed in Singapore was halted for an announcement, according to an exchange filing.
The move is a blow to Top Glove and comes as Malaysia’s main industries — palm oil and gloves — come under intense scrutiny for poor labor practices.
Photo: Lim Huey Teng, Reuters
The CBP in December last year banned imports of Sime Darby Plantation Bhd, the world’s largest palm planter, citing allegations of forced labor. It took similar action on planter rival FGV Holdings Bhd.
The CBP Office of Trade, in consultation with the US Department of the Treasury, on Monday said that it imposed the penalties against the Malaysian firm after having found “sufficient information to believe that Top Glove uses forced labor in the production of disposable gloves.”
The order expands a directive last year banning imports from two units of the company.
The withhold release order that the CBP issued in July last year was based on reasonable, but not conclusive information that multiple forced labor indicators exist in Top Glove’s production process, it said.
“Today’s forced labor finding is the result of a months-long CBP investigation aimed at preventing goods made by modern slavery from entering US commerce,” Troy Miller, senior official performing the duties of the CBP commissioner, said in a statement.
North America accounts for 22 percent of Top Glove’s total sales volume, Kenanga Investment Bank Bhd said in a report yesterday.
Factories belonging to Top Glove were found to be a major source of COVID-19 infections in Malaysia last year.
The Malaysian government in November last year ordered the company to shut 28 of its factories in phases after discovering thousands of new cases there, and carried out raids on its dormitories. Its workers hail from countries like Bangladesh and Nepal.
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