Published: Thu, October 12, 2017
Money | By Armando Alvarado

Kobe Steel ops in S'pore 'not affected by scandal'

Kobe Steel ops in S'pore 'not affected by scandal'

They included Toyota Motor Corp, Central Japan Railway, Mitsubishi Heavy Industries, Mazda Motor Corp and Subaru Corp, the companies confirmed.

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.

The crisis at Kobe Steel is the latest in a string of recent scandals at major Japanese companies.

On Wednesday, Kobe Steel said a steel-powder product, which is used to manufacture parts such as gears, also could be a problem.

Hitachi said its new trains in Britain used Kobe Steel but had all passed rigorous tests.

"Products used (for both Japanese and British trains) met safety standards".

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Kobe Steel spokesman Gary Tsuchida told the BBC the firm regrets the falsification of data. A multi-year investigation led by the U.S. Bureau of Safety and Environmental Enforcement concluded that the suppliers of the bolts for several blowout preventers were cutting corners on their manufacturing processes, raising the risk of failure.

The companies are trying to determine if substandard materials were used in their products and, if so, whether they present safety hazards. However, it declined comment on a media report that materials used in semiconductors were also impacted by the scandal. An internal probe has revealed that data were fabricated for about 19,300 tons of aluminium products, 2,200 tons of copper products and 19,400 units of aluminium castings and forgings shipped to clients between September 2016 through August 2017.

Investors, anxious about the financial impact and potential legal fallout, again dumped Kobe Steel stock, wiping about $1.6 billion off its market value in two days. Yesterday it plunged a further 17.8 percent to close at 878 yen.

Kobe Steel has not released the names of the manufacturers that received the affected goods, nor whether any of its own products might have incorporated them.

Last week, Nissan Motor said unqualified staff members had carried out inspections at its factories, prompting the carmaker to recall 1.2 million vehicles, though it was not clear if the quality of the vehicles had been affected. And it is just the latest in a series of affairs to embarrass Japanese industry. Takata declared bankruptcy in June. Mitsubishi Motors and Suzuki Motor both admitted past year that they had been exaggerating the fuel economy of their vehicles by cheating on tests. And electronics giant Toshiba has admitted that its executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown.

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