Scandal-hit Takata shares jump as boss hints at resignation

 28 Jun 2016 - 8:49

Scandal-hit Takata shares jump as boss hints at resignation
File photo of Takata Chief Executive and President Shigehisa Takada. Reuters/Issei Kato/File Photo

 

Tokyo: Takata shares surged on Tuesday after the airbag supplier's boss reportedly said he would resign once the company recovers from a scandal linked to at least 13 deaths and scores of injuries globally.

The Tokyo-listed stock jumped more than 10 percent to 405 yen ($4) in the afternoon, as chief executive Shigehisa Takada told the annual shareholder meeting that he would step down from his family company.

"Once I'm convinced the company is back on track, I will pass the baton" to new management, he told the closed meeting, according to Japan's leading Nikkei business daily.

The company, one of the world's biggest auto parts suppliers, declined to confirm the remarks.

But shareholders who attended the meeting confirmed Takada agreed to quit once the firm was on solid footing again.

"I don't think the president is qualified for his post," a 66-year-old shareholder told reporters outside the meeting.

Takada was widely criticised for his handling of the crisis, rarely appearing in public even as the firm plunged deeper into trouble.

Shareholders at the meeting reported that executives were peppered with angry questions about their response to the crisis. 

Ahead of the meeting, one investor told AFP: "They have to put an end to the damage that has been done. I want to hear about management's thinking on its responsibility."

Takata is facing lawsuits, investigations and huge compensation costs over a defect that can send metal and plastic shrapnel from the airbag's inflator canister hurtling toward drivers and passengers when an airbag is deployed.

At least 13 people have died in accidents linked to the defect and scores more have been injured, while the crisis has sparked the recall of some 100 million airbags worldwide.

The Nikkei recently reported that US private equity firm Kohlberg Kravis Roberts (KKR) was looking to buy a majority stake in Takata, which reported a 13.08 billion yen net loss in its latest business year.

On Monday, Honda said an airbag made by Takata exploded after a minor crash in Malaysia where the driver was killed after suffering chest injuries.

"Honda has confirmed that the Takata single stage driver's airbag inflator ruptured in a crash," it said in a statement

It was still awaiting the official cause of death, Honda added.

In morning trade, Takata's shares had plunged more than eight percent in response to the announcement from Honda, which is Takata's biggest airbag customer and the worst-affected crisis in the global scandal.

AFP