KUALA LUMPUR: The proprietary day trading (PDT) and intra-day short selling (IDSS) for Top Glove Corp has been suspended for the remainder of the day as it breached Bursa Malaysia limits.
The counter plunged as much as 30% or RM3.63 to a low of RM8.47 in early morning trade on news that the glove maker was taking legal action against vendors of Aspion Sdn Bhd for a sum of no less than RM714.86mil.
Top Glove alleged in a statement on Friday that there was a conspiracy to defraud Top Glove and fraudulent misrepresentations by Aspion's vendors during its acquisition of Aspion from former owner Adventa
Capital.
"We are of view that the claims amount likely relates to the premium that Top Glove had paid for Aspion in relation to its future earnings potential, profit guarantee and incentive component for the development of the new surgical products," said RHB Research in its morning note.
"Although it is still too early to assume that Top Glove would need to make a full MYR787.2m provision due to the misrepresentations – which would impact the company’s net profit and balance sheet – we expect such a legal case to drag and potentially impact Top Glove’s near- to mid-term NP margin as legal expenses are incurred."
At 10.10am, Top Glove is trading down RM2.97 or 24.5% to RM9.14 on the back of 21.29 million shares traded.
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