Kobe Steel confirms data tampering in iron powder products, research unit

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                                                            |By Yuka Obayashi

Image Zoom |By Yuka Obayashi

While there has not been any reports that Kobe Steel products posed safety risks, the company is likely to face lawsuits from investors, customers, consumers and regulators in Japan and USA, experts say. He criticized the apparently widespread falsification of data as "inappropriate".

Another case involved 6,611 items of sputtering target materials shipped to 70 customers beginning in November 2011.

But it said most of those materials, used to deposit thin films from various materials onto components such as computer chips, were re-inspected and are thought to have met customers' specifications.

It also found one case of falsified data on iron powder products - material used for auto parts such as gears - that were shipped to a customer.

Shares in Kobe Steel fell by almost 40% in two days, wiping more than $1.5bn (£1.1bn) off its market value after the firm admitted fabricating data about the strength and durability of products it delivered to more than 200 companies. It was not clear whether the scandal affected the safety of their products.

"We have confirmed that aluminium from Kobe Steel is used in the hoods and doors of some of our vehicles", Nissan said in an email.

Honda spokesman Tamon Kusakabe told AFP: "As to safety, we are still studying (a possible) impact".

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However, it declined comment on a media report that materials used in semiconductors were also impacted by the scandal.

"We can't rule out the possibility that the external investigation will find other cases", Katsukawa said, adding no customers had raised any safety issues or stopped buying its products.

Boeing said in a statement it was working "with our suppliers since being notified of the issue".

Kobe Steel said it discovered the violations during internal inspections and "emergency quality audits".

The scandal hits a tender spot for Japan. Its faulty airbags have been blamed for more than a dozen deaths. Major automakers are also engaged in massive recalls and facing criticism for allegedly continuing to use the defective air bags despite knowing of the problem. Mitsubishi Motors and Suzuki Motor both admitted past year that they had been exaggerating the fuel economy of their vehicles by cheating on tests.

"This is not going to be the end of Kobe Steel, it could be the end for management", he said in a Bloomberg TV interview.

In Japan and overseas, manufacturers that have used Kobe Steel materials have been racing to check that the safety of their own products has not been compromised.

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