Kobe Steel scandal grows to include subsidiaries


A scandal about falsified quality data at Kobe Steel expanded on Friday, as the Japanese steel maker said nine subsidiaries, including several outside Japan, had either failed to carry out required product checks or had lied about the results.

Including products sold by the subsidiaries, Kobe Steel said it now estimated that it had shipped substandard or potentially substandard materials to about 500 customers, up from an initial estimate of around 200.

“We are trying to understand how this could possibly happen at so many subsidiaries, including overseas,” Kobe Steel’s chief executive, Hiroya Kawasaki, said at a news conference.

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Mr. Kawasaki repeated a promise to complete in two weeks an investigation into potential safety hazards related to the data falsification, and to deliver in a month the results of a broader examination of the company’s failings which now look systemic and global.

Kobe Steel supplies metal components to industries where safety is vital, including car, train and aircraft producers, and makers of electronics and other equipment. The company says it is working with its customers to determine if any of the affected material, mostly aluminum and copper, poses a safety risk.

The subsidiaries named on Friday included three in China, one each in Thailand and Malaysia and four based in Japan. They make a products like copper piping and aluminum and steel wire.

Employees at the companies are supposed to test the products to ensure that they meet design standards specified in customer contracts. Kobe Steel said that in some cases the tests were not carried out, and in other cases employees recorded fake results to make it seem as though the products met customers’ standards when they did not.

Executives said the data manipulation was deliberate.

Mr. Kawasaki said that Kobe Steel’s international investigation was continuing, and that more cases of data falsification could emerge. The revelations so far have reverberated through supply chains and cast a shadow over Japan’s reputation for precision manufacturing.

The scandal touched Japan’s embattled nuclear industry on Friday. Tokyo Electric Power, owner of the Fukushima Daiichi nuclear power plant, which experienced meltdowns after a tsunami struck it in 2011, said it had sourced improperly certified copper piping from Kobe Steel.

Tokyo Electric said the piping, which it bought for use at its Fukushima Daini nuclear power station, near Fukushima Daiichi, had not been checked to ensure it met size requirements. But it said the piping had never been installed, and was in storage, and did not pose a safety threat.

Kobe Steel said on Sunday that employees had altered inspection certificates on aluminum and copper products from September 2016 to this past August, constituting about 4 percent of the company’s output of those items during the period, but that it was examining other possible episodes of data falsification going back 10 years.

On Wednesday, Kobe Steel added two more products to the list of affected materials: powdered steel, which is used to create molded steel products like gears; and “target material,” a specialty mix of metals used to produce DVDs, television screens and other electronics equipment.



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