Scandal-hit Kobe Steel, Japan's third-largest steelmaker, seeks a $440 million bank loan and pulls its forecast for the first annual profit in 3 years. Silvia Antonioli reports.
A bow might not be quite enough to placate the nerves of Kobe Steel's shareholders and clients'. Japan's third-largest steelmaker has pulled its forecast for the first annual profit in 3 years and it's cancelled plans to pay a dividend. And is reportedly seeking a 4-hundred-and-fourty- million-dollar banking loan, as it deals with the impact one of Japan's biggest corporate scandals ever related to falsified products specification (SOUNDBITE) (Japanese) KOBE STEEL EXECUTIVE VICE PRESIDENT, NAOTO UMEHARA, SAYING: "The recent misconduct that our company's products went through is forecasted to affect and cut this fiscal year's recurring profit by 10 billion yen." The steelmaker admitted this month that it has found evidence of tampering in specifications sent to clients. Those clients-- who produce anything from cars, airplanes and even nuclear plants-- are now scrambling to check whether Kobe's products are safe. Many are changing supplier and Kobe also had a government-sanctioned seal of quality revoked (SOUNDBITE) (English) SENIOR MARKET ANALYST, LONDON CAPITAL GROUP, JASPER LAWLER, SAYING: "Obviously there's going to be a large element of mistrust going forward. And I think all they can do is be as transparent as possible and this is one of the first, early stages of that process." Kobe Steel says that 88 out of 525 affected customers have yet to confirm its products were safe. The company's share price has lost a third of its value since the scandal came to light wiping out 1-point-5-billion-dollars from its stock value.