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Kobe Steel crisis deepens as plant inspected for breach of industrial law

time2017/10/20

Kobe Steel crisis deepens as plant inspected for breach of industrial law
One of Kobe Steel Ltd’s (5406.T) copper plants was being inspected for a possible breach of industrial standards, the government said on Friday, while the company said it was investigating reports it continued shipping products after discovering widespread tampering of product data.


An aerial view shows Kobe Steel's Kobe Works steel plant in Kobe, western Japan, in this photo taken by Kyodo May 25, 2013. Picture taken May 25, 2013. Mandatory credit Kyodo/via REUTERS
The inspection by the Japan Quality Assurance Organization started on Thursday, a company spokesman told Reuters by phone.


The industry ministry said the inspection was being carried out at a copper tube plant at Hatano, southwest of Tokyo.

If the company’s products fail to meet industrial standards set by the government, it would be a breach of law, deepening the crisis at Japan’s embattled third-largest steelmaker. Until now, the company had said products it sold with falsified data met safety and other standards but did not meet contract specifications agreed with customers.

Kobe Steel said it would hold a news conference later on Friday on the falsification.

Japan’s third-largest steelmaker said on Oct. 8 that it found widespread falsification of data on the strength and durability of products sent to customers. The falsifications stretch back for more than 10 years, a senior executive told Reuters this week.

The company is now subject to a U.S. Justice Department probe while checks continue at hundreds of its clients involved in complex supply chains spanning the globe.

Global automakers, aircraft companies and other manufacturers have scrambled to identify potential hazards in their products because of the falsification.

The company has said no illegality had been found related to the data fabrication and no safety issues have yet been reported.

Kobe Steel is also checking into a Nikkei report that it continued shipping products with falsified data after discovering the cheating in August, the company spokesman said.

Government ministers waded into the fray on Friday, with one saying the government would take an active role in getting to the bottom of a scandal that is tarnishing the image of Japanese manufacturers.