Japan’s Kobe Steel yesterday lost one-fifth of its market value after it admitted falsifying quality data for aluminum and copper products shipped to about 200 clients, including auto giant Toyota Motor Co.
The stock dived 22 percent to finish at ￥1,068, its maximum daily loss limit — wiping almost US$1 billion dollars off the firm’s market value.
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 nation’s reputation for quality.
Photo: Reuters / Kyodo
After conducting an in-house probe, Kobe Steel — which once employed Japanese Prime Minister Shinzo Abe — on Sunday admitted 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 yesterday’s session was the first Japanese market reaction to Kobe Steel’s 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 it would affect the safety of their products.
It followed a separate admission by a subsidiary company last year that it has falsified data for materials used in household appliances.
“This is a serious matter that shakes the foundation of fair commercial transactions,” Japanese Ministry of Economy, Trade and Industry metal industries division Director Yasuji Komiyama said.
The ministry has told Kobe Steel to contact affected clients, analyze the safety of the products in question and find ways to prevent a repeat.
“We trust that they are working with clients to ensure the safety of their final products,” Komiyama added.
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 yesterday reportedly had materials sourced from Kobe Steel.
Kobe Steel’s probe has so far found that data were falsified for about 19,300 tonnes of aluminum products, 2,200 tonnes of copper products and 19,400 units of aluminum castings and forgings shipped to clients between September last year and August.
The announcement followed a series of corporate scandals that have hit major Japanese brands.
Automaker Nissan Motor Co Ltd this month announced a recall of more than 1 million vehicles after admitting that workers without proper certification routinely conducted the final inspections for new vehicles to be sold in the domestic market.
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