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Japan's Kobe Steel under fire for fudging data on metals

12 October 2017

Kobe Steel's research institute found data that may have been falsified for an iron powder product and another that's not aluminum or copper, spokesman Tatsuro Kano said by phone Wednesday, declining to identify the latter because investigations are ongoing.

It also found one case of falsified data on iron powder products - material used for auto parts such as gears - that were shipped to a customer.

In the U.S., General Motors said it is checking whether its cars contain falsely certified parts or components sourced from Kobe Steel, the latest major automaker to be dragged into the widening scandal. It could also undermine confidence in Prime Minister Shinzo Abe's moves to improve corporate governance as part of his program of Abenomics.

Kobe Steel spokesman Gary Tsuchida told the BBC the firm regrets the falsification of data. Conglomerate Toshiba Corp 6502.T is still battling the fallout of a scandal over reporting inflated profits.

Kobe Steel's president, Hiroya Kawasaki, bowed deeply in a formal apology, lamenting that "Trust in our company has dropped to zero".

On October 8, 2017, Kobe Steel announced that "a portion of the products traded with customers did not comply with the product specifications, which were agreed between the Company and its customers". It apologized and said it had appointed lawyers to investigate. He was speaking before meeting an industry ministry official to discuss the matter.

Mr Tsuchida insisted that Kobe Steel was taking all necessary steps to investigate how this happened.

If you look at previous instances with "companies initially saying it is a single, one-off, it has always expanded to more and more parts of the business", said Alexander Robert Medd, managing director at Bucephalus Research Partnership Ltd. "To our knowledge it has not affected any customer's products at this stage", he said.

"We can't rule out the possibility that the external investigation will find other cases", Katsukawa said, adding no customers had raised any safety issues or stopped buying its products.

MHI said Kobe Steel products were used on its Mitsubishi Regional Jet and rockets, including a H-2A rocket launched on Tuesday to put a navigation satellite into orbit.

Boeing said in a statement it was working "with our suppliers since being notified of the issue".

Akihiro Tada, director of the ministry's Manufacturing Industries Bureau, urged the company to move quickly in resolving the problems, which are thought to have affected numerous country's largest manufacturers.

Japan's Kobe Steel under fire for fudging data on metals