Kobe Steel said to have likely faked data for over a decade

Kobe Steel chief executive Hiroya Kawasaki last Friday said about 500 companies had received its falsely certified products, more than double its earlier count.
Kobe Steel chief executive Hiroya Kawasaki last Friday said about 500 companies had received its falsely certified products, more than double its earlier count. PHOTO: BLOOMBERG

TOKYO (REUTERS, BLOOMBERG) - Kobe Steel falsified data on product quality and specifications longer than the 10 years that the company had previously stated, a source with knowledge of the matter said.

Japan's No. 3 steelmaker is still trying to nail down the extent of the tampering, the source told Reuters, requesting anonymity because he was not authorised to speak to the media.

Kobe's global review of its business units is likely to show further instances of data falsification, the executive said, asking not to be named as the information is not public. The company said last week that the oldest misconduct it has uncovered so far dates back to 2007.

The cheating went on for decades with the knowledge of plant and quality control managers, the Nikkei reported earlier, without identifying the source of the information.

The revelations have sent shockwaves through supply chains around the world and hammered Kobe shares, which fell to near five-year lows on Monday (Oct 16) on worries about the financial and legal fallout of the cheating scandal.

Last week, investors knocked about US$1.8 billion (S$2.4 billion) off the value of the company as successive revelations deepened the crisis.

The shares were trading nearly 6 per cent higher on Tuesday.

Kobe Steel chief executive Hiroya Kawasaki last Friday said about 500 companies had received its falsely certified products, more than double its earlier count.

None of the 500 customers that may have been affected by the scandal has raised specific safety concerns or recalled products.

Jefferies Japan analyst Thanh Ha Pham cited management as saying that customer feedback so far, including from beverage can producers and railway companies, is that no immediate recalls are required and that products involved are not a safety concern.

The units implicated in the crisis make the steel, copper, aluminium and other materials that account for over half the company's revenue, and its supply chain spans some of the largest auto, train and plane makers, including Ford Motor, Boeing, and Hitachi.

Toyota Motor supplier Denso said it is expanding its investigation of materials supplied by Kobe after learning that data falsification applied to products other than aluminium and copper, according to spokesman Shuji Kojima.

Subaru is also checking its products, said spokesman Miyuki Asuda.

Tokyo Metro and Seibu Railway are investigating whether Kobe's aluminium parts are used in their trains, spokesmen for the train operators said separately.