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Malaysian electronics firm ATA says does not use forced labour

KUALA LUMPUR, May 21 (Reuters) - Malaysian electronics firm ATA IMS Bhd said on Friday it did not use forced labour at its factories after a prominent rights activist said U.S. authorities were going to scrutinise the company’s work practices.

ATA rejected allegations of unethical recruitment and labour violations after Nepal-based labour rights activist Andy Hall said U.S. authorities had agreed to look into a unit of the company after he said he had received complaints from some of its workers.

“For foreign workers we do practice zero fees recruitment and comply with government immigration conditions which are totally ethical recruitment practices and not forced labour,” ATA said in an emailed statement to Reuters.

In a separate statement to the stock exchange, ATA said it has not received any communication from the CBP or any other similar government authority,

ATA’s shares fell 18% on Thursday amid speculation of U.S. scrutiny, but recouped some of the losses with a rise of 7.7% on Friday.

The company said third-party inspections had not corroborated Hall’s allegations.

Hall said the U.S. Customs and Border Protection (CBP) had sent him a letter telling him it had agreed to investigate the ATA unit after he said he had received the complaints.

The CBP could not be reached for comment outside U.S. working hours.

Hall provided Reuters with a copy of the letter he said he had received from the CBP, which was dated April 19.

“CBP reviewed the petition and determined the information is sufficient to investigate the merits of this allegation,” the letter said.

CBP has banned four Malaysian companies in the last two years on forced labour concerns, giving the nation the highest number of U.S. import bans after China.

Three of the bans remain in place. (Reporting by Liz Lee; Writing by A. Ananthalakshmi; Editing by Alexander Smith and Carmel Crimmins)

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