Investing.com-- Shares of Japan’s IHI Corp (TYO:7013) fell on Wednesday after its aerospace unit was suspended from participating in competitive bidding by the country’s space agency for five months over improper cost claims on government contracts.
The company on Tuesday said its consolidated subsidiary, IHI Aerospace, received a suspension from Japan Aerospace Exploration Agency effective June 2.
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The move came after the company was found to have submitted reports stating certain contracted work had been completed when parts of the work remained unfinished.
Tokyo-listed IHI shares dropped as much as 7% to 2,411.0 yen -- their lowest since Sept. 2025.
According to IHI, the issue involved contracts related to maintenance of equipment used in the manufacture of space-related hardware and the procurement of components. The company said costs were claimed based on reports that did not accurately reflect the status of the work.
An internal investigation covering 438 contracts dating back to fiscal 2016 found similar irregularities in 14 contracts, including 13 equipment-maintenance contracts and one component-procurement contract.
IHI said it reported the matter to JAXA in December 2025 and has continued to cooperate with the agency’s investigation.
The company said inspections conducted by an independent quality assurance department found no impact on product quality or on the assembly of final products.
IHI added that it is assessing the potential impact on earnings and will disclose any material effects if necessary.
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