Tokyo - Toyo Tyre & Rubber fell by the most in four years in Tokyo trading, after disclosing that it supplied a rubber product used as building material that failed to meet certification for protecting against earthquakes.
Rubber-laminated bearings sold by Toyo Tyre as certified by the Ministry of Land, Infrastructure and Transport doesn’t conform to the regulator’s criteria, the Osaka-based company said in a March 13 statement. The supplier to carmakers said it will work with the ministry in offering exchanges of the product and hired a law firm to conduct a review.
Toyo Tyre plunged as much as 18 percent, the biggest intraday drop since March 2011, just after the record earthquake that hit Japan’s north-east. The shares declined 14 percent as of 1.25pm in Tokyo trading, making it the worst performer in the 1 858-member benchmark Topix index.
Japan’s real estate developers stepped up adoption of higher quake-absorbing building methods following the magnitude-9 earthquake in March 2011, which triggered a tsunami and left almost 20 000 people dead or missing. Using rubber bearings as foundation so that seismic energy can shift from structures can help buildings avoid major damage.
The rubber bearings were delivered from July 2004 through February of this year and used in 55 properties, according to the company statement.
Bloomberg