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Kobe Steel admits fabrication scandal now affects 500 clients

13 October 2017

The company's disclosures had up until now dealt with aluminum, copper and iron ore products used in everything from cars to computer hard drives to Japan's iconic bullet trains, although there haven't been any reports of products being recalled or safety concerns raised.

Europe's Airbus does not buy products directly from Japan's Kobe Steel but is investigating whether any of its suppliers have been affected by a cheating scandal at the Japanese group, an Airbus spokesman said.

Nuclear power plant parts are the latest to join the list of affected equipment as Fukushima nuclear operator Tokyo Electric Power (Tepco) said on Friday it had taken delivery of pipes from Kobe Steel that were not checked properly.

The latest company to comment on its links to Kobe, Ford Motor Co., said Friday it used aluminum from the company in its Mondeo vehicle hoods in China, although it hasn't confirmed whether the parts were compromised.

The affair has wiped $1.9 billion from Kobe Steel's market value and led to speculation it could be broken up.

Boeing Co, has some of the falsely certified products, a source with knowledge of the matter told Reuters, but stressed that the world's biggest maker of passenger jets does not as yet consider the issue a safety problem.

Toyota, Honda and Subaru said they used materials that were subject to falsification, Bloomberg reported.

No safety issues have yet been identified in the unfolding imbroglio.

Announcing the contract jointly with Safran in 2014, Kobe said the parts for A350 landing gear would be manufactured by Kobe Steel and its affiliate Japan Aeroforge in Kurashiki.

Kobe Steel shares fell almost nine per cent on Friday and have fallen more than 40 per cent since the scandal broke.

"If you think of any other competitive industry in the commodity business, if one of the major players were knocked out it's looked at as potential for supply disruption which benefits the other players", Hogan added.

"We can not rule out the possibility that this will shake Kobe Steel to its foundation".

Investigations have been completed on about 100 of the companies that Kobe supplied, CEO Hiroya Kawasaki said Thursday.

Kobe Steel admits fabrication scandal now affects 500 clients