Kobe Steel confirms data tampering in iron powder products, research unit

Kobe Steel confirms data tampering in iron powder products, research unit

Kobe Steel confirms data tampering in iron powder products, research unit

Kobe Steel said it was contacting its customers and working to verify the safety of the products it supplied and has set up a committee headed by its president to investigate quality issues and hired an outside law firm to conduct a probe into the misconduct.

Investors, anxious about the financial impact and potential legal fallout, again dumped Kobe Steel stock, wiping about $1.6 billion off its market value in two days.

The Japanese government urged steelmaker Kobe Steel on Wednesday to clarify the extent of manipulation of inspection data on steel, aluminium and other metals used in a wide range of products, reportedly including rockets, aircraft and cars, in the latest quality scandal to rock Japanese manufacturing.

He said the company - which has said it was examining possible data falsifications going back 10 years - has begun an external investigation of all its units, including those overseas.

About 200 of Kobe Steel's customers, including some makers of defence equipment, were affected, Nogami said.

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Concern has spread across a range of industries - including vehicle, train and aircraft manufacturers - that source materials from Kobe Steel. Central Japan Railway said while some Kobe Steel parts for its bullet trains did not meet Japanese industrial standards, there were no safety issues.

In 2015, it was revealed that Toyo Tire & Rubber 5105.T fabricated data to secure government approval for materials to absorb shocks from earthquakes.

Toshiba Corp is still battling the fallout of a scandal involving reporting inflated profits.

Auto giant Toyota has already said Kobe Steel supplied materials to one of its Japanese factories, which used them in hoods, rear doors and surrounding areas of certain vehicles.

Kobe Steel shares closed at the limit low after being untraded for the whole session, diving 22 percent to 1068 yen.

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However, it declined comment on a media report that materials used in semiconductors were also impacted by the scandal.

Toyota, Nissan, Honda, Mitsubishi Motor, Subaru and Mazda joined aviation firms and defense contractors Mitsubishi Heavy Industries, Kawasaki Heavy Industries and IHI that have used the steelmaker's products, AFP reported.

It's not the first time Kobe Steel has been caught up in falsifying data. Kobe Steel said it had failed to carry out tests it had agreed to conduct, and improperly "rewrote" inspection data.

"We want Kobe Steel to make the utmost effort to restore trust from society", he said.

In a statement on Wednesday, Kobe Steel denied a Nikkei business daily report that it meant to put its real estate business up for sale to help shore up its finances.

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