Kobe Steel admits data fraud went on for nearly 5 decades; CEO to quit

Mar 07, 2018 | News On Japan

Mar 07, 2018 (Japan Today) - Kobe Steel Ltd admitted on Tuesday its data fraud has been going on nearly five decades and also revealed new cases of cheating, highlighting the challenges facing the 112-year-old company mired in compliance failures and malfeasance.

Japan's third-biggest steelmaker said its CEO will step down to take responsibility for the widespread data fraud scandal that came to light last year, although doubts remain over its corporate culture and the possibility of future fines.

Kobe Steel, which supplies steel parts to manufacturers of cars, planes and trains around the world, admitted last year to supplying products with falsified specifications to about 500 customers, throwing global supply chains into turmoil.

The company, in announcing the results from a four-month-long investigation by an external committee, said it had also found new cases of impropriety, widening the total of affected clients to 605, including 222 customers overseas.

"I feel heavy responsibility as our data falsification has caused trouble to so many customers," the resigning CEO and chairman, Hiroya Kawasaki, told a news conference.

"I've offered my resignation ... as I think preventive measures should be done under a new management," he said.

Kawasaki will leave his post on April 1, with his successor to be decided soon by the board, the company said.

Inappropriate actions were widespread, and were carried out with the knowledge and involvement of many, including management, the company said.

Kobe Steel also announced the resignation of Executive Vice President Akira Kaneko and temporary pay cuts for up to 80 percent of all internal directors and executive officers.

The case was one of the country's biggest industrial scandals in recent memory, which set off a rash of malfeasance revelations by other Japanese heavyweights, hitting the country's reputation for manufacturing excellence.

In the past several months, Mitsubishi Materials Corp, Toray Industries and Ube Industries have also admitted to product data fabrication while automakers Nissan Motor and Subaru Corp have revealed incorrect final inspection procedures.

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