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December 22, 2017

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Kobe Steel: execs aware of cheating

KOBE Steel Ltd, at the center of a data-falsification scandal that has shaken Japan’s manufacturing industry, admitted for the first time that executives were aware of the cheating, and reassigned three senior officials.

Japan’s No. 3 steelmaker, which supplies the manufacturers of cars, planes and trains across the world, has said about 500 customers had received products with falsified specifications, throwing global supply chains into turmoil.

Outside investigators appointed by Kobe to look into the malpractice have found that senior officials in the company’s copper and aluminum business knew of some of the cheating.

“Based on this information, as of today, we have reassigned these three executives,” the company said, adding it would decide on any punishments after the probe was completed.

The three were senior officials in the company’s aluminum and copper business, where most of the cheating occurred.

Kobe Steel “takes it very seriously that current executive officers were aware of this,”

Kobe also said the investigation would be completed by around the end of February, two months later than expected.

The 112-year-old company has had Japanese government-sanctioned seals of quality revoked on many of its products and is also the subject of a US Justice Department inquiry.

Kobe Steel has been in touch with the Justice Department multiple times since an initial contact through lawyers, Yoshitsugu Nishimura, a public relations manager, said at the briefing. He declined to provide further details.

No safety issues have so far been identified from the data cheating, which mainly involves falsely certifying the strength and durability of products.


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