Japan’s Kobe Steel Raided as Fake Data Scandal Rumbles On

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China Daily

June 7, 2018

The Tokyo head office and other facilities of Kobe Steel Ltd were raided by police and prosecutors on Tuesday over a protracted quality data fabrication scandal that has raised concern about the nation’s manufacturing industry.

Along with its head office in Tokyo, Kobe Steel’s headquarters in Kobe, Hyogo Prefecture, and three of its manufacturing plants were also searched by police and prosecutors.

They suspect that the company, already embroiled in a data fabrication scandal after intentionally misrepresenting its products, may have violated fair trade competition laws.

“We are dealing seriously with the investigation,” a public relations official of the company was quoted as saying on Tuesday.

The embattled company has already admitted to falsifying inspection data on hundreds of aluminum and copper products for both the domestic and international market.

The company’s own internal probe concluded in a final report issued in March that it had altered data related to the strength and other pertinent aspects of its products at a total of 23 of its plants in Japan and abroad.

It said the fraudulent practices were carried out so that its products appeared to meet their clients’ specifications on aspects like tensile strength and durability.

The scandal-mired steelmaker said in October that it had found cases of improprieties regarding inspection data that failed to meet industry inspection standards.

The results of an internal probe initially found that products sold that had their inspection data fabricated were shipped to hundreds of companies.

Japan’s quality control authorities subsequently revoked certification for some copper products of a Kobe Steel subsidiary and the Japanese government said it had tasked industrial standards-approved bodies to carry out inspections at Kobe Steel’s plants in an effort to deal with the company’s wide-reaching falsified inspection data scandal.

Kobe Steel had initially admitted to falsifying inspection data on a number of its products, including aluminum, copper, steel powder and special steel products.

It came to light that the embattled steelmaker’s own investigations had, additionally, revealed cover-ups and more incidents of data falsification thereafter.

Companies ranging from automakers and airplane manufacturers, to defense equipment and Shinkansen bullet train makers, have been affected by the scandal.

Kobe Steel said that its products, with falsified data about their strength and durability, had been sold to around 600 companies.

The company, founded in 1905 and a bastion of Japan’s manufacturing sector for decades, admitted that more than 40 employees were involved in the falsification practice, which the firm said had been endemic in the company since the 1970s.

Tuesday’s raids and the protracted nature of the data fabrication scandal have led to doubts being cast on corporate governance in the manufacturing industry and beyond Japan, and cast serious aspersions over Japan’s once stellar reputation for precision manufacturing, industry experts said.

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