NEW YORK, Jan. 20, 2018 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Kobe Steel Ltd. ("Kobe Steel" or the "Company") (OTCMKTS: KBSTY) and certain of its officers. The class action, filed in United States District Court, for the Southern District of New York, is on behalf of a class consisting of investors who purchased or otherwise acquired Kobe Steel's American Depositary Receipts ("ADRs") between May 29, 2013, and October 12, 2017, both dates inclusive (the "Class Period"), seeking to recover damages caused by defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Kobe Steel securities between May 29, 2013, and October 12, 2017, both dates inclusive, you have until February 26, 2018, to ask the Court to appoint you as Lead Plaintiff for the class. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Kobe Steel is one of Japan's largest steel manufacturers and a major supplier of aluminum and copper products. The Company's other business segments include wholesale power supply machinery, construction machinery, real estate and electronic materials.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company falsified data on many of its aluminum, copper and steel products sold to customers; (ii) the Company sold products that in reality failed quality control tests in violation of laws and regulations; (iii) the Company's financial performance relied on selling products that did not meet quality standards in violation of laws and regulations; (iv) the Company would incur significant costs and lose customers if customers became aware of the substandard quality of products they purchased; (v) the Company's compliance initiatives, corporate governance and risk management activities were ineffective and inadequate at preventing product data manipulation, fraud and other related misconduct; (vi) the Company's internal reporting systems failed to foster employee participation and adequately address employee concerns, and there was an excessive propensity by senior management, including the Individual Defendants, to hyper-emphasize profitability at all costs, that promoted a pervasive culture of corner-cutting, and looking the other way in the face of compliance violations, as long as profits were achieved, which deterred employees from making claims over product quality for fear of retribution and/or management failing to properly investigate claims; and (vii) as a result of the foregoing, Kobe Steel's shares traded at artificially inflated prices during the Class Period, and class members suffered significant losses and damages.
On October 8, 2017, the Company issued a press release entitled "Improper conduct concerning a portion of the aluminum and copper products manufactured by Kobe Steel." The press release disclosed that certain of Kobe Steel's products "did not comply with the product specifications" and "[d]ata in inspection certificates had been improperly rewritten etc., and the products were shipped as having met the specifications concerned."
On this news, Kobe Steel's ADR price fell $0.62, or over 10% from its previous closing price, to close at $5.30 per share on October 9, 2017.
On October 10, 2017, before the U.S. market opened, Reuters published an article entitled, "Kobe Steel's data-fabrication stuns Japanese manufacturers," which disclosed that several major manufacturers had confirmed use of the affected Kobe Steel products.
On this news, Kobe Steel's ADR price fell $1.30, or over 24% from its previous closing price, to close at $4.00 per share on October 10, 2017.
On October 12, 2017, post-market, Bloomberg published an article entitled, "Kobe Steel Scandal Expands Into Core Business Overseas," which reported that the Company's fake data scandal included its core business of providing steel to numerous international companies.
On October 13, 2017, Kobe Steel issued a press release entitled, "Report on improper conduct concerning Kobe Steel and its group of companies." The press release provided updated information about an investigation into the falsified data and related wrongdoing and listed numerous nonconforming products the Company had identified to date. On the same day, several media outlets reported that the number of impacted customers had more than doubled from the initial estimates of 200 customers.
Following these news, Kobe Steel's ADR price fell $0.40, or over 10% from its previous closing price, to close at $3.55 per share on October 13, 2017.
Subsequent news reports and the Company's own internal investigation revealed that Kobe Steel's lack of quality controls and data tampering was a result of, among other things, wholly inadequate and ineffective corporate governance and compliance initiatives.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
SOURCE Pomerantz LLP