KUALA LUMPUR, Nov 27 (Reuters) - Shares in Malaysia’s Supermax Corp Bhd, the world’s No. 2 maker of rubber gloves, tumbled sharply on Monday after its founder was convicted of insider trading concerning another company he used to head, and sentenced to five years in jail.
Group managing director Stanley Thai, accused of communicating non-public information about APL Industries Bhd in 2007 when he was chief executive of the firm, has appealed both the decision and sentence, Supermax said.
In addition to the jail sentence, which has been suspended while Thai appeals, he was also fined 5 million ringgit ($1.2 million).
Supermax Chairwoman Rafidah Aziz said in a statement released on Monday that the company stood strongly behind Thai and that the company was conducting business as normal.
Shares in Supermax were down 7 percent in early afternoon trade, giving the rubber glove maker a market value of some $314 million as of midday. Earlier they fell as much as 14 percent.
CIMB Research cut its rating on Supermax to a “hold” from “add” and lowered the target price on the company to 2.03 ringgit from 2.46 ringgit.
But CIMB analyst Walter Aw also said that Supermax’s business operations should remain unscathed and that the stock had largely priced in the issue as it has been trading at an average discount of 21.1 percent to its peers since Thai was charged in 2014.
Supermax is the second largest rubber glove manufacturer in the world by volume, exporting to at least 155 countries. It also manufactures contact lenses and recently said it wants to acquire a Japanese contact lens maker. ($1 = 4.1160 ringgit) (Reporting by Liz Lee)