Sumitomo Mitsui Construction Falls Most in 18 Years on Probe

  • Investigation is underway after a building found tilted
  • Apartment building sold by Mitsui Fudosan located in Yokohama

Shares of Sumitomo Mitsui Construction Co. fell the most in almost 18 years after Nikkei reported that an apartment building in Yokohama was constructed based on falsified data.

Mitsutoshi Tenda, a spokesman for the seller, Mitsui Fudosan Co., said his firm and Sumitomo Mitsui Construction are investigating the apartment building that is tilted onto one side. The building was one of four that were part of a project sold in 2006.

Shares of Sumitomo Mitsui Construction fell 31 percent to 109 yen at the close in Tokyo, the biggest decline since Nov. 26, 1997. Mitsui Fudosan declined 2.9 percent to 3,325 yen.

Sumitomo Mitsui Construction failed to check part of the foundation before building the apartment, and the construction was based partly on falsified data, the Nikkei newspaper reported earlier, citing unidentified officials from Japan’s Land Ministry and the city.

Sumitomo Mitsui Construction has started daily briefing sessions to residents since last weekend and will hold about 10 of them, said spokesman Toyohiko Hirata via telephone.

“Because of the building flaw, we are currently explaining what we know so far to the residents,” said Hirata, declining to comment further because he said the matter is still under investigation.

A subcontractor in charge of part of the building’s foundation had revised some of the data, Mitsui Sumitomo Construction said in a statement late Wednesday. The company said it doesn’t yet know if there will be an impact on its earnings. 

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