Kobe Steel under police probe over data manipulation

April 25, 2018

Tokyo- Tokyo prosecutors and police have launched a joint investigation into Kobe Steel Ltd.'s product quality data manipulation scandal, over suspicions that the major steelmaker violated the unfair competition prevention law through fraudulent labeling, investigative sources said Wednesday.

The Tokyo District Public Prosecutors Office and Tokyo's Metropolitan Police Department are questioning officials involved, according to the sources.

Kobe Steel has confirmed the falsification of quality data for some aluminum and copper products that did not reach public standards or strength levels promised to customers. Those products, used in automobiles and aircraft, were shipped to a total of 688 customers at home and abroad.

The US Justice Department has started looking at the issue and damages suits have been filed against Kobe Steel in the United States and Canada.

With the launch of the probe by the Tokyo prosecutors and police, this scandal, which has dealt a blow to Japan's reputation for manufacturing excellence, is now expected to develop into a criminal case.

The manipulation dates back to the 1970s and involved five former and current executives of the steelmaker.

Kobe Steel announced the problem in October last year.

Based on the results of an investigation by an outside committee, the company compiled a report in March this year, in which it said there were deep-rooted problems in terms of corporate culture and employees' mindset.

Among other Japanese manufacturers, subsidiaries of Mitsubishi Materials Corp. and Toray Industries Inc. were also found to have been involved in product quality data manipulation. In December last year, a unit of Toyo Tire & Rubber Co. was fined for violating the same law by falsifying performance data for earthquake-shock absorbing rubber products.

A Kobe Steel official said the company will respond with sincerity to the ongoing investigation by the authorities. Jiji Press