February 22, 2019
Kobe Steel, Ltd.
A civil complaint was filed against Kobe Steel, Ltd. (hereinafter referred to as "Kobe Steel" or the "Company") in the United States District Court Southern District of New York (the "Court"). On February 21, 2019 (local time), the Court entered an order approving the stipulation and agreement of settlement between the Company and the Lead Plaintiff, which has ended the lawsuit against the defendants including the Company.
Lead Plaintiff purchased American Depository Receipts (hereinafter referred to as "ADRs") of Kobe Steel. On December 26, 2017 (local time), Lead Plaintiff filed a class action lawsuit in the Court against the Company alleging violations of relevant provisions of the Securities Exchange Act of 1934 based on the defendants' alleged misstatements about Kobe Steel's adherence to its own code of ethics and product quality. Lead Plaintiff sought to represent a class consisting of all persons who purchased or otherwise acquired the publicly traded Kobe Steel ADRs from May 29, 2013 to March 5, 2018.
On September 21, 2018 (local time), the Company entered into the stipulation and agreement of settlement (hereinafter referred to as the "Stipulation") with Lead Plaintiff, after due consideration of various factors, including the cost of defending the lawsuit. Subsequently, the parties to the lawsuit submitted the Stipulation to the Court for approval of the class-wide settlement. On February 21, 2019 (local time), the Court entered an order approving the Stipulation, which has ended the lawsuit against all defendants including the Company.
In exchange for the dismissal with prejudice and release of all the claims in the lawsuit, the Company will pay the sum of $500,000 (approximately 56 million Japanese yen) as the settlement amount to be distributed to the settlement class members, including the Lead Plaintiff above, who purchased or otherwise acquired Kobe Steel ADRs or ordinary shares of Kobe Steel in the United States on the open market during the period from May 29, 2013 through and including March 5, 2018.
We believe the effect that the end of the lawsuit will have on the business performance of the Kobe Steel Group is insignificant.