Kobe Steel shares melt as false data scandal heats up

TOKYO: Japan’s Kobe Steel lost a fifth of its market value on Tuesday after it admitted falsifying quality data for aluminium and copper products shipped to some 200 clients, including auto giant Toyota.
The stock dived 22 per cent to finish at 1,068 yen ($9.50), its maximum daily loss limit — wiping almost a billion dollars off its market capitalisation.
The brewing scandal is the latest in a string of quality control and governance issues that have hit major Japanese businesses in recent years, undermining the country’s reputation for quality.
After conducting an in-house probe, Kobe Steel — which once employed Japan’s Prime Minister Shinzo Abe — admitted on Sunday it had shipped products that did not meet client specifications, including strength data.
The Tokyo bourse was closed on Monday for a public holiday so Tuesday’s session was the first Japanese market reaction to Kobe Steel’s embarrassing admission.
The company said the fabrications, which might have started a decade ago, could affect products sent to as many as 200 companies. It was not clear whether that would affect the safety of their products.
Toyota said Kobe Steel supplied materials to one of its Japanese factories, which used them in hoods, rear doors and surrounding areas of certain vehicles.
“We are rapidly working to identify which vehicle models might be subject to this situation and what components were used, as well as what effect there might be on individual vehicles,” it said in a statement.
Mitsubishi Heavy Industries, producer of the Mitsubishi Regional Jet passenger plane, was reportedly among the clients affected. A rocket it launched on Tuesday reportedly had materials sourced from Kobe Steel.
Kobe Steel’s probe has so far found that data were fabricated for about 19,300 tonnes of aluminium products, 2,200 tonnes of copper products and 19,400 units of aluminium castings and forgings shipped to clients between September 2016 through August 2017.— AFP