Shares in Kobe Steel have gone into meltdown as Tokyo's bourse reopen, wiping XXXX off its market value
Tokyo (AFP) - Japan’s Kobe Steel lost a fifth of its market value on Tuesday after it admitted falsifying quality data for aluminium and copper products shipped to some 200 clients, including auto giant Toyota.
The stock dived 22 percent to finish at 1,068 yen ($9.50), its maximum daily loss limit – wiping almost a billion dollars off the firm’s market value.
The brewing scandal is the latest in a string of quality control and governance issues that have hit major Japanese businesses in recent years, undermining the country’s reputation for quality.
After conducting an in-house probe, Kobe Steel – which once employed Prime Minister Shinzo Abe – admitted Sunday it had shipped products that did not meet client specifications, including strength data.
The Tokyo bourse was closed Monday for a public holiday so Tuesday’s session was the first Japanese market reaction to Kobe Steel’s embarrassing admission.
The company said the fabrications, which might have started a decade ago, could affect products sent to as many as 200 companies.
It was not clear whether that would affect the safety of their products.
But it followed a separate admission by a subsidiary company last year that it has falsified data for materials used in household appliances.
“This is a serious matter that shakes the foundation of fair commercial transactions,” said Yasuji Komiyama, director of the metal industries division of Japan’s Industry Ministry.
“It’s a very regrettable incident,” he told a press briefing.
The ministry has told Kobe Steel to contact affected clients, analyse the safety of the products in question and find ways to prevent a repeat.
“We trust that they are working with clients to ensure the safety of their final products,” Komiyama added.
Toyota said Kobe Steel supplied materials to one of its Japanese factories, which used them in hoods, rear doors and surrounding areas of certain vehicles.
“We are rapidly working to identify which vehicle models might be subject to this situation and what components were used, as well as what effect there might be on individual vehicles,” it said in a statement.
Mitsubishi Heavy Industries, producer of the Mitsubishi Regional Jet passenger plane, was reportedly among the clients affected.
A rocket it launched Tuesday reportedly had materials sourced from Kobe Steel.
Kobe Steel’s probe has so far found that data were falsified for about 19,300 tons of aluminium products, 2,200 tons of copper products and 19,400 units of aluminium castings and forgings shipped to clients between September 2016 through August 2017.
The announcement followed a series of corporate scandals that have hit major Japanese brands.
Automaker Nissan this month announced a recall of more than a million vehicles after admitting that workers without proper certification routinely conducted the final inspections for new vehicles to be sold in the domestic market.
And airbag maker Takata went bankrupt after its defective products were linked to 16 deaths and scores of injuries worldwide.