Thien Long Group shareholder Newell Brands under US investigation

The federal investigation is a new setback for Newell – a US-based manufacturer of consumer and commercial products, the maker of Rubbermaid containers and Sharpie markers – as it tries to turn its fortune around under a new leadership team. The SEC issued a subpoena to Newell in January, after making several informal requests for information, as cited by Wall Street Journal.

Newell Brands – a shareholder of Thien Long Group – is under investigation by the US Securities and Exchange Commission (Photo: The Streets)

One focus of the probe, Newell said, is its treatment of goodwill – the premium a company pays when it buys another for more than the value of its net assets. The SEC’s subpoena relates primarily to the company’s “sales practices and certain accounting matters” from the start of 2016 onwards, Wall Street Journal reported.

Newell wrote down more than $9 billion of goodwill and trade names in 2018, one of the biggest goodwill impairments that year, according to valuation firm Duff & Phelps LLC. Newell at the time said most of the write-down reflected a decline in its market value.

Global rating agency Moody’s rated Newell at the lowest investment grade, while the firm was also downgraded to junk-bond status by S&P Global in last November.

Previously, Newell agreed to divest nearly half of its businesses to pay down debts and buy back stock, expecting initially to generate $10 billion in proceeds from those divestitures, but later lowering its expectations to $9 billion.

The company has since sold several units, including Rawlings baseball gloves, Pure Fishing gear, Jostens class rings and yearbooks, and Goody hair products.

Last year, NWL Cayman Holdings, a subsidiary of Newell, invested in Thien Long – one of the leading Vietnamese suppliers of stationery. It is rumoured that the US giant has bought five million shares from Thien Long, equalling to 7 per cent.

NWL Cayman Holdings, a subsidiary of Newell, bought into Thien Long

Currently, Thien Long is exporting products to 61 nations and is preparing the groundworks and technology for further expansion. VIR also reported that the firm aimed to expand its overseas footprint by priming up investment in other countries, particularly Singapore.

As of March 5, shares of Thien Long trimmed slightly to VND37,800 ($1.64) per share as investors signalled continued anxiety about economic prospects as they piled their funds into safe-haven assets such as gold and bonds.