Kobe Steel CEO Resigns After Data Fraud Investigation

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(Newswire.net — March 7, 2018) —

The 112-year-old company admitted to tampering with data regarding the quality of its products back in October 2017, but has just now come out with a report.

The findings come as a response to the Independent Investigation Committee’s investigation. The IIC was established four months ago when Kobe brought in third party auditors to begin investigating the issue.

Kobe, operating internationally as Kobelco is Japan’s third largest steel manufacturer and they supply about half of the world market with wires for valve springs that are used in car engines. They are also one of the leading suppliers of steel parts for airplane and train manufacturers.

It was initially thought that around 500 customers were delivered falsified quality specifications for their purchased materials, but the four-month investigation has increased that number to 688, of which 222 are international clients.

In a press conference the Kobe company CEO Hiroya Kawasaki has publicly stated he will be resigning, as well as Executive Vice president Akira Kaneko.

In the conference Mr. Kawasaki said “I feel heavy responsibility as our data falsification has caused trouble to so many customers,” adding “I’ve offered my resignation … as I think preventive measures should be done under a new management.”

Kobe Steel claims to have “deep seated issues” regarding compliance and lack of communication within the corporate structure. They plan to prevent similar issues from occurring again by bringing in new directors and rotating staff around the company making it less insular.

A U.S. Justice Department probe of Kobe is ongoing, so the company may still face fines as well as legal issues.

Customers of Kobe Steel include large manufacturers such as Boeing, General Motors, Honda and Toyota. They have begun investigations into the steel they were using. No callbacks or safety issues have yet been released, and no deaths or injuries have been blamed on the products using Kobe Steel.

Taking into account other scandals such as Mitsubishi’s and Suzuki’s 2016 fuel performance fraud controversies, as well as Nissan Motors and Subaru data falsification cases, worldwide faith in Japanese manufacturers has definitely been shaken.