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Kobe Steel shares plunge after more potentially fake data revealed


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Kobe Steel shares plunge after more potentially fake data revealed

Kobe Steel Ltd. revealed Oct. 11 that its iron ore powder may also have been provided with falsified quality data, along with previously disclosed aluminum and copper products, sending its shares plunging as key customers including Toyota Motor Corp. and Boeing said they were investigating whether they had been affected.

Japan's third-largest steelmaker's shares closed down 18% at 878 yen per share on the Tokyo stock exchange, taking its two-day loss to almost 36%, after its admission, which has flagged quality concerns across the Japanese manufacturing industry. Shares in Shinsho, Kobe's biggest customer by sales, have fallen 24% so far this week.

Toyota called the quality falsification a "grave issue" and said it was working to identify which of its auto models might be affected, Bloomberg reported.

Boeing also said it was investigating, adding: "Nothing in our review to date leads us to conclude that this issue presents a safety concern, and we will continue to work diligently with our suppliers to complete our investigation."

The spread on Kobe's notes due November 2021 jumped 148 basis points to a record 202.5 on Oct. 10, while five-year credit default swaps jumped more than 180 basis points to a 19-month high, Bloomberg said.

Yasuji Komiyama, director of metal industries at Japan's Ministry of Economy, Trade and Industry, said the scandal was "threatening fair and proper trading" by other companies, the Financial Times reported Oct. 10.