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Japan's Kobe Steel may find more data fabrication cases, no recalls planned
From:Xinhua  |  2017-10-12 18:54

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TOKYO, Oct. 12 (Xinhua) -- The chief executive of Kobe Steel Ltd. warned on Thursday that there may be further cases of falsified data than have been previously disclosed, in a widening scandal over its inspection data that has affected hundreds of companies.

Following revelations that the embattled steelmaker had falsified data for its iron powder, aluminum and copper products that has affected companies ranging from automakers to airplane manufacturers, Kobe Steel Ltd. Chairman and President Hiroya Kawasaki said there could be more cases contributing to the unfolding scandal.

"There are suspicious cases in Japan and abroad that could involve further wrongdoing, as the ongoing investigation has not been completed," Kawasaki told a press briefing on the matter, following a meeting with an official from the trade ministry.

Kobe Steel has already admitted that its products, with falsified data about their strength and durability, have already been sold to around 200 companies globally, with the depth of the scandal so damaging that the government here has ordered the steelmaker to report the results of new safety checks within a fortnight.

Kawasaki, stating that no recalls on products will be made at the moment, said in his first public appearance since Sunday's revelations, that the results of safety inspections on shipped products would be made within two weeks and details of the firm's response to products undergoing false inspection data given.

He added that the root cause of the extensive scandal, that has affected auto giants such as Toyota, Mazda and General Motors, would also be made known within a month.

Kawasaki did not rule out the possibility that Kobe Steel might be liable for compensation claims.

In a meeting with Kawasaki, Akihiro Tada, director general of the Manufacturing Industries Bureau of the Ministry of Economy, Trade and Industry, said the scandal had shaken the very core of fair trade.

"The issue shakes the foundation of fair trade and is extremely regrettable. The incident affects the trust of the Japanese manufacturing industry as a whole. We take the matter seriously," Tada said at the meeting, the outset of which was open to the press.

Kawasaki, for his part, said he wanted to regain the public's trust and said that trust in Kobe Steel "had fallen to zero."

On whether or not he will step down as the company's chief to account for the scandal, Kawasaki said he will fully look into the details of the matter with his responsibility in mind.

Investigations have shown that Kobe Steel knowingly shipped some 20,000 tons of aluminum and copper products with fabricated inspection data.

The beleaguered firm also said on Wednesday that an internal probe had revealed that 140 tons of iron powder shipped in fiscal 2016 did not meet customer specification and that one of its subsidiaries, Kobelco Research Institute, had falsified data related to the production method of liquid crystal displays, DVDs and other electronic equipment.

In Japan, much attention has been given to the country's iconic Shinkansen bullet trains, with major operators Central Japan Railway and West Japan Railway stating that their trains contained aluminum parts sourced from Kobe Steel that did not meet industry standards.

Beyond automakers and trains, Kobe Steel has also been implicated in fabricating data for aerospace and defense-related products.

Kobe Steel was founded in 1905 and has been a bastion of Japan's manufacturing sector.

The revelations, however, of the data fabrication scandal, has cast doubts over corporate governance in the manufacturing industry and beyond in Japan.