Kobe Steel Announces More Cases Of Faked Inspections Data

The scandal over product inspections data faked by Japanese materials and machinery giant Kobe Steel expanded Friday to include products shipped to more than 500 customers.

Mnet 193908 Kobe Steel Quality Ap

TOKYO (AP) β€” The scandal over product inspections data faked by Japanese materials and machinery giant Kobe Steel expanded Friday to include products shipped to more than 500 customers.

Kobe Steel's president, Hiroya Kawasaki, told reporters the company had uncovered nine more types of products whose inspections had been faked or manipulated, including copper alloy pipes and molds and steel wire rods used in vehicle tires and engines.

The problems disclosed by Japan's third-largest steel maker are just the latest in a slew of product quality, accounting and corruption scandals that have dented Japan's image of superior manufacturing prowess.

The latest problems were discovered with shipments of more than 11,000 tons of steel, copper, and aluminum products made by Kobe Steel and its affiliates in Japan, China, Malaysia and Thailand, the company said.

Kawasaki at times appeared close to tears while explaining how it was that the company had chosen not to disclose some of the cases that had been discovered much earlier and discussed at past board meetings.

"Right now, our top priority is to find out the cause and take preventive measures, and to determine if our inadequate products affected our customers," he said. "I plan to put all my energy into that effort."

"I'm most troubled by the magnitude and the extent to which this problem has spread," Kawasaki said.

Kawasaki said he did not expect any product recalls due to the misconduct.

Earlier, the 112-year-old company reported it had discovered bogus inspections or faked data for steel powder, aluminum flat-rolled products and castings, copper strips and tubes and forgings.

The exact extent of the problem remains unclear since Kobe Steel has not identified the customers affected. But it is a major supplier to many manufacturers, including railways, automakers, aircraft manufacturers, semiconductor factories and nuclear power plants.

According to the company's website, Kobe Steel has a 50 percent world market share for wire rod products, a 40 percent world market share for built-up and solid crankshafts used in ship propulsion systems and half the Japan market share for aluminum panels used in engine hoods for vehicles.

The company also makes casks for nuclear waste and other equipment used in both conventional and atomic power plants.

Tokyo Electric Power Co., said Friday it had bought a backup duct for a heat exchanger for one of four reactors at one of two nuclear power reactors in northeastern Japan's Fukushima that narrowly survived the 2011 tsunami despite some damage.

TEPCO said in a statement that a Kobe Steel subsidiary, Shinko Metal Products Co., informed it the product came with inappropriate measurement data.

There is no concern over safety because the duct was bought as a backup and was not used.

TEPCO said it has requested further investigations by Kobe Steel of products shipped to the utility and its subsidiaries. TEPCO is also investigating.

Kobe Steel has recorded net losses in the past two fiscal years, but Kawasaki said he did not believe the corner-cutting resulted from excess pressure from top management.

He acknowledged the company may have to compensate some customers for any damages.

"Naturally, we are prepared for it," he said.

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