MSWG Weekly Newsletters 13 April 2018 (English)




The Board of Directors of CGB clarified that on 15 March 2018, the group’s wholly owned subsidiary, Comfort Rubber Gloves Industries Sdn. Bhd. (“CRGISB”) was listed under Import Alert of the U.S Food and Drug Administration (FDA). This has resulted in CRGISB examination glove shipments to the United States (“U.S.”) requiring inspections upon arrival in the U.S and released after passing an inspection. The group is working towards removal from the Import Alert list through its U.S agents and is confident of securing the removal from the Import Alert list. The FDA Import Alert listing does not prevent the group from exporting to U.S. Upon removal from the Import Alert list, CRGISB examination glove shipments will no longer require inspection. Therefore, the operations of the group have not been disrupted by this incident and are continuing in normal operation.

[Source: CGB’s announcement on Bursa Malaysia’s website on 6 April 2018]


CGB share price plummeted by 37.5% within 10 days from RM1.12 on 27 March 2018 to as low as 70 sen on 5 April 2018. We believe the detention of CRGISB’s glove shipments by the U.S. regulator could be a notable contribution to the sharp drop in CGB’s share price.

We are of the opinion that the FDA Import Alert listing against the CGB group’s products would have significant impact on the Group’s financial performance, as the U.S. and Canada market contributed approximately 42.5% to the Group’s revenue. The impact on the financial performance will be from the lag time due to the need for pre-inspection and the risk that some customers may terminate/reduce their orders due to this pre-inspection lag time.

MSWG Weekly Newsletter 06 April 2018 (English)


The AGM season is gaining momentum and we have attended a few AGMs. Below are some of our observations:

1. Step-up practice of 9 year tenure limit for independent directors

Step-up 4.3 of MCCG states that the board has a policy which limits the tenure of its independent directors to nine years.

Step-up practices are meant to encourage companies to go a step further in strengthening their governance practices and processes. Companies that aspire to achieve excellence in corporate governance in particular, Large Companies, should consider the adoption of Step-ups.

Some companies have erroneously stated that they have adopted the Step-up and then go on to say that beyond the 9 years they would put up the independent director’s re-appointment for shareholders’ approval at the AGM.

The Step-up prohibition is absolute in that the independent director cannot continue as an independent director after 9 years.

MSWG Weekly Newsletter 30 March 2018 (English)



There has been a lot of fuss in the news recently over the Fake News Bill.

From the capital-markets perspective, ‘Fake News’ can have real and damaging consequences to unsuspecting members of the public who fall prey to the fraudulent investment advice on various online investment platforms purportedly written by market experts and ‘gurus’ but which are essentially ‘pump and dump’ schemes benefiting the perpetrators.

According to the SC, spreading such false information about listed companies for fraudulent self-benefit is an offence under Section 178 of the Capital Markets and Services Act 2007 (CMSA). Section 178 is aptly titled ‘Fraudulently inducing persons to deal in securities’.

The SC has always taken a stern stance on white-collar crime. This is also reflected by the recent charging of two investment bankers, Tan Giap How and Ng Ee Fang, and another Executive Director of a public listed company, Daniel Yong Chen-I, for offences relating to the insider trading of Hirotako Holdings Bhd shares in 2011 when it was the subject of a takeover by MBM Resources Bhd. Insider trading is an offence under Section 188 of the CMSA which carries an imprisonment term not exceeding ten years and to a fine of not less than one million ringgit.