Kobe Steel Falsified Quality Data for Metal Used in Cars

Kobe Steel parts used in Japan’s iconic bullet trains failed industry standards bringing to light fresh evidence of wrongdoing by the steelmaker as investors speculated that the crisis could trigger a breakup of the 100-year-old company

Kobe Steel Falsified Quality Data for Metal Used in Cars

Japanese steel maker Kobe Steel has disclosed nine new cases of falsified information about products and materials it sold for use in cars, aeroplanes and a slew of other products, as the ongoing scandal escalated further on Friday (13 October).

Customers have been informed about the issue, which has been resolved, Tokyo-based spokeswoman Eimi Hamano said, declining to provide details.

Jefferies Group LLC has said splitting the producer along business lines could be a way for the 100 year-old company to weather the scandal, with Japan's No 2 steelmaker, JFE Holdings Inc, touted as a possible buyer of its steel assets.

Kobe Steel said the falsification of quality data "has brought overwhelming shame to the company". The question to be resolved is "were they trying to save money or just unable to produce the right spec in the right quantities", he said.

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The latest company to comment on its links to Kobe, Ford Motor Co., said Friday it used aluminum from the company in its Mondeo auto hoods in China, although it hasn't confirmed whether the parts were compromised.

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

Kobe Steel Ltd's deepening crisis around fudged data across a swathe of metals products could mean that even a breakup of the company isn't enough to salvage value for shareholders, according to Alexander Robert Medd, managing director at Bucephalus Research Partnership Ltd.

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