Kobe Steel scandal deepens with criminal probe of data tampering

The Tokyo District Public Prosecutors Office's special investigative unit has already subpoenaed documents from Kobe and suspects the company, Japan's third-largest steelmaker, of criminally misrepresenting data.

Kobe Steel said on Wednesday that it is under investigation by Japanese authorities over its data tampering, widening a scandal that undermined faith in Japan's industrial sector past year.

Kobe Steel is not new to scandals.

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

Kobe Steel, which supplies steel parts to manufacturers of cars, planes and trains around the world, has admitted to supplying products with falsified specifications to more than 600 customers, and admitted the data fraud had been going on for almost five decades.

A total of 23 plants and units in the Kobe Steel group altered quality assurance documents to wrongly claim that products met client specifications for such factors as strength.

The companies have said the falsified data does not impair the safety of their products. The products were sent to around 200 companies. Mitsubishi Materials Corp. subsidiaries and Toray Industries Inc. also said products with falsified data were supplied to customers.

Beyond automakers and trains, Kobe Steel has also been implicated in fabricating data for aerospace and defense-related products.

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Along with domestic firms such as Toyota Motor Corp., Nissan Motor Co., Honda Motor Co. and major Japanese railway operators, the scandal has also affected overseas companies including General Motors Co., Ford Motor Co., Airbus and Boeing Co.

"We deeply apologize for causing great trouble to the people involved", Kobe Steel said in a statement Wednesday, adding the company will "sincerely respond (to the probe) and cooperate (with the authorities)".

In one year alone since 2016, Kobe Steel products were sold to 688 companies in Japan and overseas.

The company 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.

The U.S. Justice Department has already requested documents from Kobe Steel in a separate investigation launched a year ago.

The revelations of the data fabrication scandal, however, have cast doubts over corporate governance in the manufacturing industry and beyond in Japan, and cast serious aspersions over Japan's once stellar reputation for precision manufacturing, industry experts here said.

And some products were shipped stamped with the Japanese Industrial Standards seal even though the required inspection was not carried out.

Nissan Motor Co. and Subaru Corp. admitted to having unqualified workers conduct new auto tests at their domestic plants, triggering recalls in the Japanese market.

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