Kobe Steel confirms data tampering in iron powder products, research unit

Kobe Steel confirms data tampering in iron powder products, research unit

Kobe Steel President Hiroya Kawasaki warned on Thursday there may be more cases of falsified product data, in a sign the unfolding scandal may worsen.

"It seems in some cases quality control was undertaken by veteran employees who had lots of experience, highly trusted within the organisation, and somehow these discrepancies slipped by them", company spokesperson Gary Tsuchida said. Companies from Japan and overseas are investigating whether safety of their products has been compromised.

Shares in Kobe Steel fell by almost 40% in two days, wiping more than $1.5bn (£1.1bn) off its market value after the firm admitted fabricating data about the strength and durability of products it delivered to more than 200 companies.

Akihiro Tada, director general at the manufacturing industries bureau of the Ministry of Economy, Trade and Industry, made the comment before a meeting with Kobe Steel executives.

Steel maker Kobe Steel has apologised after finding problems dating back to 2011 including faked inspections data for metals used in many products, including cars, bullet trains, aircraft and appliances.

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.

"The scandal looks similar to that of Toyo Tire, and not as massive (or) devastating as Takata's. But we are still investigating and it's premature to say if recalls will be necessary".

And Honda said that aluminium produced by Kobe Steel had been used in doors and bonnets of some of its cars.

The Japanese government has asked the company to provide more information about the products supplied to more than 200 customers, reportedly including some of the country's biggest manufacturers, including defence contractor Mitsubishi Heavy Industries and a number of automakers.

If you are aware of any facts relating to this investigation, or purchased Kobe Steel shares, you can assist this investigation by visiting the firm's site: www.bgandg.com/kbsty.

It's not the first time Kobe Steel has been caught up in falsifying data. "Data in inspection certificates had been improperly rewritten etc., and the products were shipped as having met the specifications concerned". Our investigation concerns whether Kobe Steel has violated the federal securities laws and/or engaged in other unlawful business practices.

In a statement on Wednesday, Kobe Steel denied a Nikkei business daily report that it meant to put its real estate business up for sale to help shore up its finances.

The steelmaker reported losses in the last two financial years, but has said it expects to return to profit this year.

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