The scandal engulfing Mitsubishi Motors has intensified after government officials raided one of its offices and shares in the Japanese carmaker plunged to an all-time low.
Panicked by the revelation that Mitsubishi had overstated the fuel efficiency of more than 600,000 cars traders rushed to dump the stock, prompting a temporary suspension of shares.
The mass sell-off on Thursday was on course to push shares down 20% as trades were halted amid an overwhelming number of sell orders, threatening to wipe off one-third of the company’s value in just two days.
It followed a 15% fall in shares in Tokyo on Wednesday, when Mitsubishi admitted to falsifying data to flatter the mileage rates clocked up on the vehicles in question.
The crisis at the carmaker escalated further when Japanese officials raided one of its offices in Okazaki.
The government said the case was “extremely serious” and has given Mitsubishi until 27 April to report on the matter.
Japan’s chief cabinet secretary, Yoshihide Suga, said: “Based on [the results of] the raid, and a report from the company, we would like to reveal the extent of the inaccuracies as soon as possible.
“We will deal with the situation in a strict manner and would like to make sure of the safety of cars.”
Japan’s sixth biggest carmaker said tests were falsified on four of its mini-cars, two of which it manufactured for Nissan. The number of Nissan cars affected was 468,000, while 157,000 were sold under the Mitsubishi brand.
Mitsubishi said the cars affected were only sold in Japan. However, it said it would extend its investigation to cover cars made for overseas markets.
Akira Kishimoto, analyst at JP Morgan, said the scandal could cost Mitsubishi more than 50bn yen (£314m), including compensation to Nissan and consumers plus the cost of replacing parts.
Kishimoto added: “In addition to the costs of the scandal, the secondary effects on worldwide sales could be very large.”
Mitsubishi is the latest carmaker to be embroiled in scandal, after Volkswagen admitted last year that it rigged emissions tests.
VW has set aside €6.7bn (£4.8bn) to pay for the crisis and its shares are down almost one-third since the scandal was revealed in September.