Sometimes in business rumors can be as damaging as reality.

Such is the turmoil now being experienced by “K” Line (Kawasaki Kisen Kaisha), after stories began circulating that the Japanese container-shipping group was on the verge of bankruptcy.

Last week, the company released a statement denying the allegations.

“It has become known to us that a certain non-vessel operating common company (NVOCC) had circulated false e-mails stating a potential bankruptcy of “K” Line to their customers. The message contained in the e-mails is unfounded without basis of any financial analysis and what is stated therein is false.

“We have strongly protested to the said company, who has admitted that the statement was false and promised to send to their customers a message to retract such statement. We are also considering taking any necessary legal measures that we may have against the concerned parties.

“Our financial condition is sound,” said the “K” Line statement. According to the company, cash flow deposits as of June 30, 2016 stood at $2 billion and total net assets at $ 3.2 billion, with an equity ratio of 29.1 percent and a 154.5-percent liquidity ratio.

Kawasaki Kisen Kaisha did not formally reveal the name of the company circulating the false statements, but reports indicate the emails came from APL Logistics.

[UPDATE: APL Logistics has since admitted that some of its employees made derogatory statements about “K” Line’s financial situation to customers and have since retracted those statements.]

Bad Timing

Perhaps it’s not surprising that so many believed the rumors, and may still believe them after the company’s denial, given the current state of heightened concern over the financial health of box shippers.

Hanjin Shipping, South Korea’s biggest container line and the world’s seventh largest, filed for receivership. With no way to pay unloading fees, ports refused access to the company’s vessels, stranding billions of dollars of goods at sea.

And Hanjin is not alone. Korea’s Hyundai Merchant Marine was recently bailed out by the Korean taxpayer, and all but one of the world’s top 12 container lines posted substantial losses in the most recent quarter. Industry experts are certain that mergers are forthcoming.

“K” Line has not been immune to similar setbacks. Due to current market conditions, the company announced that it had revised its target for co-owned LNG carriers by the end of the fiscal year 2019 from 61 to 57.

There have been no additional statements since the emails and the K Line’s response, unless you count those in the comments section of the online articles reporting this story.

“The damage is already done to K Line,” one of them reads. “Nobody will ship their goods with them.”

Time will tell.