Malaysia's Top Glove Corp. (OTC: TGLVY) confirmed Wednesday that the company will be putting its Hong Kong listing on hold as it continues to work with the U.S. over its product ban.
It's been about a year that the world’s biggest rubber glove manufacturer came under pressure from the U.S. Customs and Border Protection for labor practices. In July, the U.S. imposed an import ban on Top Glove’s products.
This April, Top Glove noted it resolved the U.S Customs' concerns over forced labor issues. A month later, however, the Customs held two of Top Glove’s shipments and claimed that the company was still using several forced labor tactics in its production process.
Despite the setback for Top Glove, chairman Lim Wee Chai said at a briefing Wednesday that the U.S. ban is only temporary, as cited by Bloomberg. The Hong Kong listing is expected to be delayed for a few months. The company continues its efforts to get the Hong Kong share sale green-lighted by regulators, according to the news outlet.
The news today follows a report from Reuters that said Top Glove was delaying the listing (worth as much as $1 billion) over difficulties of resolving its U.S. ban. The company, listed in Kuala Lumpur and Singapore, was seeking a share sale in Hong Kong to broaden its international investor base.
Although Top Glove posted record profit in its latest quarter, the U.S. ban is still significant because 22% of its sales are generated in the North America market.
In early trading, Top Glove’s U.S. stock was up 3% at $4.80 apiece. Year-to-date, the OTC stock is down 13%.