March 14, 2018
Kobe Steel, Ltd.
On March 5, 2018, a civil complaint was filed against certain named parties, including Kobe Steel, Ltd., Kobe Steel USA Inc. (100% of its equity held by Kobe Steel (Note 1)), Kobe Steel International (USA) Inc. (100% of its equity held by Kobe Steel (Note 1)), and Kobe Aluminum Automotive Products, LLC (60% of its equity held by Kobe Steel (Note 1)), all of which are the subsidiaries of Kobe Steel (hereinafter collectively referred to as the "Kobe Group"), in the United States District Court, Northern District of California (hereinafter referred to as the "Lawsuit"). The Lawsuit relates to certain metal products manufactured by Kobe Steel (hereinafter referred to as the "Products") allegedly used in certain vehicle models of a specific automotive manufacturer which is one of the co-defendants in the Lawsuit.
(Note 1) The percentage is inclusive of Kobe Steel's indirect shareholding.
The named plaintiffs brought this Lawsuit, claiming the violation of implied warranties and other causes of action alleging that as a purchaser or lessee of vehicles manufactured with the Products, if the fact that the Products did not meet the certain tensile strength, thickness or other specifications had been disclosed to them, they would not have paid the amount actually paid to purchase or lease the vehicles and, further, because of the use of such Products the resale value of their vehicles has diminished.
The Plaintiffs have sought to bring this claim as a class action and are seeking damages and other relief from the Kobe Group and the five other defendants. The complaint does not specify the amount in controversy, but does claim that the amount in controversy exceeds 5,000,000 USD, which is the threshold amount of the statutory jurisdiction of the court.
As of March 13, 2018, the Kobe Group have not been in receipt of formal service of any complaint regarding the Lawsuit and understand that any court proceeding effective to them has not commenced. It is uncertain whether or when any Kobe Group may receive formal service of this Lawsuit in the future.
Upon formal service of the Lawsuit being made on any member of the Kobe Group, the Kobe Group will take such measures as determined appropriate in order to vigorously defend the Kobe Group against those claims set forth in the Lawsuit. We anticipate that claims similar to those set forth in the Lawsuit may be brought against the Kobe Group and other affiliates of the Kobe Group in the future.
Currently, we cannot determine how the Lawsuit may affect the revenue and growth for the Kobe Group. We will make a public statement regarding any impact to the revenue and growth of the Kobe Group upon receipt of such financial forecasts.
It is regrettable, and we apologize, that the Lawsuit arising from the alleged misconduct of Kobe Steel and certain of its affiliated companies also names our customers as the defendants and that it has caused tremendous trouble to those customers involved. We will continue to appropriately collaborate and work in close cooperation with our relevant customers in response to the Lawsuit and any future lawsuits that may be filed against our customers in relation to the alleged misconduct above.