Japan's Kobe Steel shares dive as quality scandal spreads


The affected products include steel wires used in vehicle engines and tyres - a key company product - as well as aluminium found in Japan's bullet trains as well as materials in high-speed trains in Britain, although it is not clear whether the scandal hit product safety.

The chief executive of Kobe Steel Ltd. warned on Thursday that there may be further cases of falsified data than have been previously disclosed, in a widening scandal over its inspection data that has affected hundreds of companies.

In a meeting with Kawasaki, Akihiro Tada, director general of the Manufacturing Industries Bureau of the Ministry of Economy, Trade and Industry, said the scandal had shaken the very core of fair trade.

Kobe Steel said that the data links back to four aluminum plants in Japan and claimed that the practice goes as far back as 10 years, meaning the problem could span all the way back to cars built in 2007 and onward.

The Japanese metals company is embroiled in a massive scandal where it's accused of manipulating inspection data on steel, aluminum, and other metals. The government has urged Kobe Steel to clarify the extent of the misconduct.

Boeing, the world's biggest maker of passenger jets, has used Kobe Steel products that include those falsely certified by the Japanese company, a source with knowledge of the matter told Reuters. They did not meet specifications agreed with customers.

Kobe Steel, Japan's third-largest steel maker, has announced that between September 1, 2016 and August 31 of this year it sold aluminum and copper materials using falsified data on such things as the products' strength.

Any large-scale program to remove those components, even during scheduled aircraft maintenance, could prove costly for Kobe Steel if it has to foot the bill. "As hoods are related to pedestrian safety, we are working to quickly assess any potential impact on vehicle functionality". Toyota came out and said that some of that aluminum was used in its auto doors and other outer areas while Honda claims to have used affected aluminum in its doors and hoods.

Subaru admitted that it used Kobe Steel products in both its cars and aircrafts, and that it was "working rapidly to identify which parts, vehicle models, and planes are subject to the matter". "At the same time, we are considering what measures need to be put in place going forward".

U.S. plane manufacturer Boeing also said it had not found any safety issues.

It is the latest in a string of quality control and governance scandals to hit major Japanese businesses in recent years, undermining the country's reputation for quality.