Plagued by data scandal, Japan's Kobe Steel mulling withdrawing full year earnings forecast

Kobe Steel said on Oct 8 that it found widespread falsification of data on the strength and durability of products sent to customers. The falsifications stretch back for more than 10 years.
Kobe Steel said on Oct 8 that it found widespread falsification of data on the strength and durability of products sent to customers. The falsifications stretch back for more than 10 years.PHOTO: REUTERS

TOKYO (REUTERS) - Kobe Steel is considering withdrawing its earnings forecast for this fiscal year as it struggles to quantify the impact of its data falsification scandal, Kyodo reported on Monday (Oct 23).

Japan's No. 3 steelmaker has forecast a profit for the year through March 2018 after two successive annual losses, but the outlook has been clouded by the potential fallout from the falsification scandal that has sent shockwaves along global supply chains.

Last Friday, the company admitted that it has lost some customers to competitors as it revealed widespread data falsification has extended to its mainstream steel sheet business.

A Kobe Steel spokesman said the report did not come from the company.

"We are making preparations for our earnings announcement and can't make any further comment," he said.

The steelmaker is due to report its first-half results on Oct 30.

Kobe Steel said on Oct 8 that it found widespread falsification of data on the strength and durability of products sent to customers. The falsifications stretch back for more than 10 years, a senior executive told Reuters last week.

The company is now subject to a US Justice Department probe while checks continue at hundreds of its clients involved in complex supply chains spanning the globe.

Global automakers, aircraft companies and other manufacturers have scrambled to identify potential hazards in their products because of the falsification.

The company has said no illegality had been found related to the data fabrication and no safety issues have yet been reported.

Last Friday, East Japan Railway said it has found parts in the undercarriage of Shinkansen bullet trains affected by the data tampering scandal and will replace them during maintenance.