🤯 How Malaysia's WRP Asia Pacific Collapsed in 2026

Forced labour ban, RM140M alleged CEO fraud, 70% butadiene shock — how a 41-year glove empire supplying the NHS and 200 countries ended in 4,000 layoffs.

Author

Admond Lee
April 19, 2026

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Today's story is about a 41-year Malaysian glove giant that survived the AIDS era and COVID-19, only to be buried by a forced-labour scandal, a governance vacuum, and a geopolitical oil shock. Let's get to it! 🚀

Today at a Glance:

  • ☠️ 1 Failed Startup → WRP Asia Pacific

  • ⚠️ 2 Mistakes → Premium model but illegal cost model

  • 🧠 3 Lessons Learned → Labour compliance is revenue protection

  • 🔗 The Runway Insights → How Corgi hit $40M ARR in 6 months

  • 💰 Southeast Asia Funding Radar → Baskit bags $4.4M (Series A) to digitise offline supply chain distribution in Indonesia and expand into the Philippines

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☠️ 1 Failed Startup: WRP Asia Pacific

🚀 The Rise of WRP Asia Pacific

🇲🇾 Founded by Tan Sri Ibrahim Mohamed in 1985, WRP Asia Pacific was a Malaysian premium rubber glove and urology catheter manufacturer that sold barrier protection to hospitals and distributors across the globe.

🕺🏻 Founders’ Story

WRP started as Wembley Rubber Products in Sepang, Selangor, back in 1985. Tan Sri Ibrahim Mohamed was a veteran Malaysian industrialist, and he saw two things colliding at the time — the AIDS crisis sending global demand for medical gloves through the roof, and Malaysia pushing hard to dominate the world's rubber downstream industry.

🧤 The bet was simple → build premium medical gloves that Western hospitals could trust, and ride the wave of global healthcare demand for decades.

  • The Problem —  🏥 Hospitals and distributors worldwide needed reliable barrier protection, but supply was messy and inconsistent.

    • The AIDS crisis had sent demand for medical gloves skyrocketing in the 1980s

    • Existing suppliers struggled with pinholes, contamination, and quality variance that put healthcare workers at risk

    • Developed-market buyers like the NHS and US hospitals needed FDA-compliant, pinhole-free gloves at massive scale

  • The Solution — 🧤 WRP built a premium manufacturer of latex and nitrile gloves, plus specialty medical devices like urology balloon catheters.

    • Proprietary dipping processes and compounding formulas for consistency

    • FDA QSR, ISO 13485, and CE Mark certifications that unlocked developed-market buyers

    • OEM manufacturing for big brands plus its own Dermagrip label sold worldwide

🇲🇾🧤 In short, WRP made the gloves that protected the world's healthcare workers — and built a global empire on it.

By 2005, the company had hit a rough patch financially.

That's when the founders brought in Datuk Lee Son Hong (the former CEO of rival APL Industries, who'd just sold APLI to Supermax) to run a turnaround.

🤔 And it worked. Kind of.

🤯 Under Lee, WRP roared back to life. Net profit jumped to RM38.6 million in 2009, and revenue peaked at RM491 million in FY2010. By then, WRP was running 44 production lines, churning out 3.65 billion gloves a year, and exporting to 48 countries.

In 2011, they drafted an IPO prospectus to list on Bursa Malaysia as "WRP World Bhd". The listing was shelved, but private equity came knocking instead — TAEL Partners entered in October 2013 via master tawarruq facility agreements, bringing institutional money in.

🔥 At its peak, WRP:

  • produced 11 billion gloves per year across 69 production lines in 3 factories

  • held roughly 12% of the US sterile surgical glove market

  • represented about 5% of Malaysia's entire glove manufacturing capacity

  • employed over 4,000 people with distribution offices in the US, Austria, Costa Rica, and UAE

  • was supplying hospitals across nearly 200 countries (including the UK's NHS)

🫡 From a single Sepang factory to one of the world's largest premium glove makers. On paper, WRP had built exactly what Tan Sri Ibrahim set out to build.

🙅🏻‍♂️ But the way they got there was about to catch up with them.

📉 The Fall of WRP Asia Pacific

💣 Then on 9 December 2018, The Guardian dropped a story bomb.

🤯 According to The Guardian's investigation, WRP — one of the suppliers making rubber gloves for Britain's NHS — was alleged to be running on forced labour. The Guardian reported allegations of debt bondage, passport confiscation, excessive overtime, and wages withheld for months. The paper also reported 3,000 workers packed into dorms built for 1,800, and factory floors said to reach 70°C. WRP denied the allegations at the time.

🔥 What followed was six years of escalating crisis — strikes, bans, a boardroom war, criminal charges. And then, right when it looked like they might survive, one final shock that broke everything.

📌 Here’s what happened to WRP Asia Pacific:

❝

It’s been three months already and we have had no pay, it is very very hard. I can’t send the money back to my family who need it. They are asking me where it is.

— shared by one Nepalese worker at WRP

🧤🧤🧤 Your Partner in Protection

  • 28 Nov 1985 — 🏭 Wembley Rubber Products incorporated in Sepang, Selangor.

  • Mar 1998 — Renamed to WRP Asia Pacific Sdn Bhd, adopted the slogan "Your Partner in Protection", and picked up a majority stake in US-based WRP Corporation.

  • 2005 — 👔 Datuk Lee Son Hong joined as CEO to run a turnaround, fresh from selling rival APLI to Supermax.

  • 2010 — 📈 Peak financial year. Revenue RM491 million, net profit RM35.7 million, exports to 48 countries.

  • 2011 — 📋 Draft IPO prospectus filed for "WRP World Bhd" on Bursa Malaysia. But the listing was shelved.

  • 29 Oct 2013 — 💼 TAEL Partners entered via master tawarruq facility agreements, bringing institutional private equity in.

🚫 When the US said no

  • 9 Dec 2018 — 🚨🚨🚨 The Guardian exposed forced labour allegations at WRP — debt bondage, passport confiscation, wage withholding. CEO Lee denied it all.

  • Jan 2019 — ✊ Around 2,000 Nepali workers went on a 3-day strike over three months of unpaid wages.

  • 30 Sep 2019 — 🚫 US Customs and Border Protection issued a Withhold Release Order banning WRP gloves from the US over forced labour concerns. WRP just lost its largest market.

  • 30 Dec 2019 — ⚖️ Kuala Lumpur High Court appointed an interim liquidator. Lee Son Hong was ousted as CEO.

  • Early Jan 2020 — 💰 TAEL Partners injected emergency funds of RM25.25 million over two rounds to pay overdue salaries and fund a turnaround team. Workers reportedly received only RM500 each, paid in cash from briefcases brought into the factory under security.

  • 23 Mar 2020 — ✅ US CBP revoked the WRO after WRP agreed to roughly US$5.4 million in remediation for about 1,600 migrant workers.

    • WRP donated 500,000 gloves to Malaysia's Ministry of Health the same day.

  • May 2020 — ⚙️ All 69 production lines reactivated, just in time for the COVID-19 glove boom.

  • 24 Nov 2020 — 🚔 Former CEO Lee Son Hong charged with 8 counts of Criminal Breach of Trust totalling RM131.85 million, plus 3 counts of false claims totalling RM8.4 million. His wife was charged with abetment. Both pleaded not guilty.

    • Forensic audits had allegedly found production line purchases between 2014–2016 inflated to over twice market value, with funds funnelled to private companies.

  • Jun 2024 — 📉 FY ending June 2024 showed revenue of RM204.6 million and a net loss of RM78 million. The post-pandemic glove glut had crushed margins.

  • 31 Mar 2026 — 📝 WRP issued a letter to global customers announcing wind-down effective 15 April, citing Middle East conflict disruptions and a ~70% surge in butadiene costs.

  • 15 Apr 2026 — 🏚️ WRP officially ceased operations. Over 4,000 employees faced redundancy.

❝

These unforeseen circumstances have forced us to make the difficult but necessary decision to begin the process of winding down business operations with effect from 15 April.

— WRP Management (in the wind-down letter to global customers)

The forced labour scandal had cost them their biggest market. Alleged fraud by their own CEO had hollowed out the balance sheet. COVID demand gave them a brief reprieve, but it masked how weak the business really was underneath.

📈 Then butadiene prices surged 70% on a geopolitical shock thousands of miles away — and there was nothing left to absorb it.

🧤🧤 At the end of the day, the company whose slogan was "Your Partner in Protection" couldn't protect itself from the mess it had built.

Want to learn more about WRP Asia Pacific’s downfall?

⚠️ 2 Mistakes

Mistake 1: Premium model but illegal cost model

WRP positioned itself as a premium manufacturer for the NHS, US hospitals, and Fortune 500 healthcare buyers. FDA, ISO 13485, CE Mark — the full premium playbook.

But underneath that label, per The Guardian's 2018 reporting, the cost model was alleged to rely on extracting value from migrant labour.

🔥 Their entire buyer base sat in jurisdictions that were systematically making that cost model illegal — UK Modern Slavery Act, US CBP Withhold Release Orders, EU due-diligence rules.

🤔 According to The Guardian's investigation, the alleged practices weren't corner cases:

  • 3,000 Nepali and Bangladeshi workers housed in dorms built for 1,800 (per Guardian reporting)

  • Passports allegedly confiscated

  • Wages allegedly withheld for up to three months

  • Factory floors reportedly hitting 70°C

💸 So when CBP issued the Withhold Release Order on 30 Sep 2019, it cut off WRP's single largest market — roughly 12% of US sterile surgical glove share — overnight. WRP later paid ~US$5.4 million in remediation to 1,600 workers to lift the ban six months later.

But by then, the trust was gone — and the governance rot underneath was already surfacing.

Mistake 2: Giving a hired CEO co-owner control without guardrails

In 2005, the founders brought in Datuk Lee Son Hong to run a turnaround. It worked — WRP hit peak profitability by 2010. But Lee's family gradually accumulated roughly 44% of WRP, nearly matching Hamidah Abdullah's ~49.8% stake.

🤫 The "hired CEO" had quietly become a co-owner.

And the board never caught up — no independent audit, no procurement oversight, no related-party check.

Between 2014 and 2016, forensic audits later alleged that Lee inflated production-line purchase prices to over twice market value, allegedly funnelling RM131.85 million to private companies said to be linked to him. Lee has pleaded not guilty, and the
litigation remains ongoing.

🧠 3 Lessons Learned

Lesson 1: Labour compliance is revenue protection

🇺🇸 On 20 September 2019, a single US Customs and Border Protection Withhold Release Order erased WRP's ~12% share of the US sterile surgical glove market.

🚨 The trigger → a December 2018 Guardian exposé documenting debt bondage, passport confiscation, and wage withholding — plus CEO Lee Son Hong's public "our workers want us to hold their passports for safekeeping" defense.

Within 90 days of the WRO, WRP couldn't pay salaries. TAEL Partners hand-delivered RM500 cash from briefcases under security escort to prevent a worker revolt.

🌮 Key Takeaways:

  • A single regulator can delete your largest export market overnight — no appeal, no negotiation window.

  • Labour abuse signals (unpaid wages, mass strikes) are leading indicators of insolvency, not HR issues.

  • "We deny the allegations" is not a remediation plan auditors or customs officers accept.

🛠️ Operator Playbook:

  • 🗺️ Map your top 3 export markets to their import-ban regimes

    • Audit your supply chain against US CBP WRO / EU CSDDD / UK Modern Slavery Act indicators — not generic CSR frameworks.

    • Ask: If CBP issued a WRO on your largest market tomorrow, could you meet payroll for >12 months? WRP's answer was ~90 days.

  • 💰 Treat migrant-worker recruitment fees as a P&L line

    • Reimburse worker-paid fees within 12 months of hiring — WRP paid ~US$5.4M to ~1,600 workers to lift its WRO six months
      in.

    • Study Hartalega Holdings — early Responsible Business Alliance audits kept them clear of CBP while WRP got hit.

Lesson 2:  Founder-invited turnaround CEOs need institutional checks

In 2005 the founders invited Datuk Lee Son Hong to run a turnaround after he sold rival APLI to Supermax. By 2010, WRP hit RM491 million revenue. Forensic audits later alleged he had funnelled roughly RM131.85 million between 2014–2016 to private entities said to be linked to him, allegedly inflating production-line prices to over twice market value.

His family held ~44% of WRP. The board never caught up. On November 24, 2020, Lee was charged with Criminal Breach ofTrust and false claims. He pleaded not guilty and the litigation remains ongoing.

🌮 Key Takeaways:

  • When a hired CEO quietly becomes a co-owner, your governance needs to catch up. If it doesn't, the system breaks.

🛠️ Operator Playbook:

  • 🧾 Put mechanical guardrails on CAPEX and related-party transactions

    • Require board sign-off on any CAPEX line > 2% of revenue, with independent valuation for equipment sourced from related
      parties.

    • Rotate a forensic audit through top 10 supplier invoices every 18 months — the annual financial audit won't catch
      transaction patterns.

  • 🏛️ Install independent oversight when family ownership concentrates

    • If a single family holds >30% equity AND the CEO seat, mandate an independent audit-committee chair with subpoena power
      over internal records.

    • Bake governance covenants into PE term sheets (audit-committee composition, related-party review) — institutional capital
      isn't the same as institutional governance.

Lesson 3: Surviving one crisis won’t save you from the next

TAEL Partners injected RM25.25 million in January 2020. The WRO was revoked by March, all 69 production lines restarted by May — right as COVID-19 detonated global glove demand.

📉 WRP should have minted money. Instead, post-pandemic oversupply
crushed margins → Malaysian glove profits plunged >80% in 2022, and by June 2024 WRP posted a RM78 million net loss on RM204.6 million revenue.

Then the 2026 Middle East conflict sent butadiene up roughly 70%. Chemical suppliers demanded cash upfront. In the end, operations ceased April 15, 2026. Over 4,000 jobs gone.

🌮 Key Takeaways:

  • A "recovered" balance sheet isn't a safety net. Without cash reserves, the next shock still ends you.

  • A demand boom (like COVID gloves) can hide how fragile you really are — until the boom ends.

  • If one raw material can kill your business, treat it as a CEO-level risk, not a purchasing problem.

🛠️ Operator Playbook:

  • 📉 Stress-test the post-recovery balance sheet

    • Run an input-shock test at every board meeting for 4 quarters post-restructuring: can we absorb a 50% spike in top 3 raw
      materials for 6 months while hitting payroll?

    • Lock 12-month forward contracts OR hold strategic inventory for any input > 25% of COGS. WRP had neither on butadiene
      when prices spiked ~70%.

  • 🧪 Diversify single-input commodity exposure

    • Qualify a second polymer (chloroprene, polyisoprene, natural latex) for 10–20% of production lines as capacity insurance.

    • Build the "which lines shut first" kill list BEFORE a cash crunch — decisions made in 24-hour panic are always worse than
      ones made with 6 months' lead time.

🔗 The Runway Insights

  • How Corgi hit $40M ARR in 6 months (Read)

  • How to Brand Your Company: The Complete Playbook (Read)

  • The slow decay of growth (and how to avoid it) (Read)

  • How we built a $7M funnel With 4 layers (Read)

💰 Southeast Asia Funding Radar

  • Baskit bags $4.4M (Series A) to digitise offline supply chain distribution in Indonesia and expand into the Philippines (More)

  • Nas.com secures $27M (Series A) to scale its AI platform for the solo entrepreneur economy (More)

  • CAEX raises $380M (Strategic) to meet Vietnam's minimum capital threshold for entering the government-regulated crypto pilot program (More)

  • Farmnet secures $11.7M (Debt Financing) to strengthen working capital and expand agricultural trade volumes across Vietnam (More)

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That’s all for today

Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.

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See you again next week.

- Admond

Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.

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