Kobe Steel shares melt as falsified data scandal heats up

Tokyo stocks up at break N. Korea fears ease

Kobe Steel CEO Kawasaki has run the company since 2013, and has recently overseen moves to expand its presence in aluminium.

Manufacturers around the world were checking the safety of cars, trains, aircraft and rockets yesterday after Japan's second biggest aluminium maker admitted falsifying safety data for more than 40,000 tons of metal going back as far as ten years.

Kobe Steel said on Sunday the products were delivered to more than 200 companies but it did not disclose customer names.

Aluminum is widely used in cars, planes and high-speed trains in Japan which use the light-weight metal to increase fuel efficiency.

Kobe Steel said it discovered the falsifications in inspections on products shipped from September 2016 to August 2017.

Honda also confirmed it used materials with false ratings in its doors and hoods, while Mazda and Mitsubishi are now investigating whether their vehicles are affected.

The falsification was meant to make the metals look as though they met client quality standards.

According to Kobe Steel, the falsification was carried out at four Japanese factories. Also Boeing Co., which gets some parts from Subaru, said there's nothing to date that raises any safety concerns.

General apprehension greeted the news and investors reacted swiftly as shares in Kobe Steel dived by more than a fifth after the company's admission to faking data about the quality of its products.

Kobe said that at present there was no evidence that the "nonconforming" products would compromise safety.

Japan's largest automaker Toyota said the compliance breach was a "grave issue", adding that Kobe Steel's products were used in vehicle doors and hoods.

In an internal audit, it was found that the company had corroborated data on the characteristics of multiple aluminum and copper parts and components.

But the Nikkei newspaper said Toyota and Mitsubishi Heavy Industries, producer of the Mitsubishi Regional Jet passenger plane, are among notable clients affected.

A rocket it launched yesterday reportedly had materials sourced from Kobe Steel. The affected products account for about 4 percent of its shipments of aluminum and copper parts and aluminum castings and forgings.

"We perceive that there was no problem as the rocket launch was a success", he said.

In all, about 200 Japanese companies are impacted, including a number of vehicle manufacturers, as well as the Central Japan Railway, or JR Tokai.

"We want Kobe Steel to make the utmost effort to restore trust from society", he said.

Nissan last week recalled more than 1-million cars in Japan.

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