In an exchange filing on Friday, Padini said the bank accounts, held by the group and its subsidiaries, were frozen under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.
The Malaysian fashion retailer tumbled as much as 15 sen or nearly 10% to RM1.40 a share at the open, its lowest level since November 2020.
The stock rebounded to RM1.52 before falling to RM1.43 by the mid-day break, with 20 million shares traded, valuing the company at RM1.41 billion. It has fallen 21% year to date and nearly 33% over the past one year.
The company said the affected accounts are not actively used for its daily operations, and that it continues to have access to other banking facilities.
In a subsequent statement on Saturday, the group said the MACC issued the freeze order as part of an investigation involving “certain external counterparties to the group who are not employees, officers or part of the group’s management”.
“The company wishes to emphasise that, based on currently available information, we are not aware of any allegation or wrongdoing on our part and understand that the freezing order is a procedure taken in the course of the investigation,” it added.
Meanwhile, MBSB Research said the latest development is primarily “a near-term sentiment risk” and maintained its “buy” call on the stock.
“Absent any evidence of operational disruption or direct allegations against the company, we do not expect any immediate earnings impact,” it said in a note today.
Established in 1971, Padini is a household name in the Malaysian fashion and garment sector. It started as a small ladies garment and wholesaling business supplying to departmental stores in Malaysia.
It subsequently created its own brand, Padini, and moved into the retail industry, focusing on “value-driven fashion”. Its other brands include Padini Authentics, Seed, PDI, Miki, Vincci, and Brands Outlet. It has over 160 own stores in Malaysia and operates in various Asian countries.
Padini is controlled by its founder and managing director Yong Pang Chaun. He and his wife, Chong Chin Lin, along with their family, hold a 43.74% stake through Yong Pang Chaun Holdings Sdn Bhd.