Kobe Steel shares ended the monday Asian trading session in the red, after the scandal hit company announced the resignation of its CEO and Vice President. The steel maker also published a complete report on the data fraud, which showed the issue had been ongoing for almost 50 years.
Kobe Steel shares closed 7.39% lower at JPY1,028. The 112-year-old company’s stock has recovered some of the steep losses it experienced when the scandal was first uncovered in October 2017.
CEO, Vice President resign
After admitting the scandal following notes of concern from the Japanese manufacturing department last year, Kobe Steel has issued numerous apologies for its wrong doing.
And now, after it has been uncovered that there’s evidence of data fraud – where unqualified employees signed off safety details for the steel and other products as fit to leave factories to be sold – has gone on for close to five decades.
As a result of the deeper investigation into the problem, President and CEO Hiroya Kawasaki and Vice President, Akira Kaneko have both resigned their positions at Kobe Steel. They will leave the company at the end of March.
In addition, two managing executives, Takumi Fujii and Nobuaki Isono, have been fired. And, various members of the remaining Kobe Steel leadership team will face significant wage reductions for specific periods.
Kobe Steel also said that two previous company directors would voluntarily return a portion of the remuneration they received from Kobe Steel when they were at the helm.
Lawsuit filed against Kobe Steel, Toyota
Separately from the manufacturer’s action following the complete report, two Californian residents have filed a law suit against Kobe Steel and Toyota in a federal court in San Francisco.
The suit accuses both companies of producing and selling products in the US that don’t follow consumer protection laws. They are also accused of fraud, for selling products that contain sub-standard metal.
Kobe Steel is also being investigated by the US Justice Department.