Daiwa House Residential Scraps Share Sale Amid Toyo Tire FalloutKathleen Chu
Daiwa House Residential Investment Corp. scrapped a plan to sell shares after it discovered building materials supplied by Toyo Tire & Rubber Co. at one of its properties didn’t meet government standards.
The Japanese real estate investment trust canceled the plan to sell as much as 10.1 billion yen ($83 million) because the impact of the finding on its profit is unclear, it said in a statement Wednesday. Daiwa House also canceled a plan to take out loans and delayed the purchase of five properties, it said.
Daiwa House is the first company to cancel a public offering after Toyo Tire said on March 13 it failed to get proper certification for rubber bearings. Shares of Toyo Tire plunged 17 percent in the past three days after it said 55 buildings used its rubber products that failed to get proper certification. The properties include hospitals, apartments and police stations.
Toyo Tire and the land ministry have yet to disclose the names of all affected buildings for fear of reputational damage and misinformation, said Junya Narita, deputy director in the ministry’s housing production division.
Maizuru Medical Center in Kyoto prefecture and Shima Hospital in Mie prefecture were identified as being among six hospitals with materials that haven’t been properly certified, according to the ministry.