Kobe Steel shares tumble to near 5-year low as cheating crisis deepens
Shares of embattled Kobe Steel Ltd tumbled to their lowest level in nearly five years on Monday, as a cheating scandal at the Japanesesteelmaker ensnared hundreds of companies and left investors fearing for the financial and legal fallout. Chief Executi ive Hiroya Kawasaki on Friday revealed that about 500 companies had received its falsely certified products, more than double its earlier count, confirming widespread wrongdoing at thesteelmaker, Japan’s third largest. Kobe shares touched 774 yen in the morning session on Monday, the lowest since December 11, 2012, before recovering to close at 827 yen ($7.6), a gain of 2.73 percent from the previous day.
No safety problems have surfaced as the Japanese steelmaker attempts to get a grip on the data tampering that it earlier said may go back as far as 10 years.
The revelations over the past week rippled through supply chains across the world as companies from operators of Japan’s famous bullet trains to the world’s biggest aircraft maker, Boeing Co, were ensnared in the scandal.
The scale of the misconduct at the steelmaker hammered its shares as investors, worried about the financial impact and legal fallout, wiped about $1.8 billion off its market capitalization last week.
Kobe Steel also said last week that the problems had gone beyond Japan with data falsification at subsidiaries in Thailand, China and Malaysia.
Gary Tsuchida, a spokesman for Kobe Steel, told the Beijingbased Caijing magazine on Friday that “its customers are doing the product checks and no quality issue has occurred at the moment.”
The Kobe Steel manufacturers in China include Suzhou Kobe Copper Technology Co, Jiangyin Sugita Fasten Spring Wire Co and Kobelco Spring Wire (Foshan) Co, the media report noted.
Kawasaki said Thursday that no recalls on products will be made at the moment, and the results of safety inspections on shipped products will be available within two weeks, according to the Xinhua News Agency.
Kobe Steel initially admitted at the weekend it had falsified data about the quality of aluminum and copper products used in cars, aircraft, rockets and so on.