Industryweek 25145 Steel 0 0

Tokyo Prosecutors Indict Kobe Steel Over Data Falsification

July 19, 2018
Kobe Steel admitted in October that employees misrepresented the strength and durability of parts shipped to hundreds of customers, including Toyota Motor Corp. and Boeing Co.

Tokyo prosecutors indicted Kobe Steel Ltd. over the faked data crisis that rocked Japan’s manufacturing industry last year.

The company was indicted on suspicion of breaching Japan’s unfair competition law in connection with falsified inspection reports for the year through September 2017, the Tokyo District Public Prosecutors Office said Thursday in a statement.

Kobe Steel admitted in October that employees misrepresented the strength and durability of parts shipped to hundreds of customers, including Toyota Motor Corp. and Boeing Co., sparking similar revelations from materials suppliers including Mitsubishi Materials Corp. and Toray Industries Inc. that have tarnished Japan’s manufacturing reputation.

Kobe Steel acknowledged the indictment in a statement and said it is implementing measures to prevent a recurrence of the scandal.

Prosecutors and police last month searched Kobe Steel’s headquarters in Kobe and Tokyo. The nation’s third-biggest steelmaker said in March that an external probe had found its misconduct around quality controls dates back to the 1970s, and that more than 40 people in managerial positions had been aware of the faked data.

A firm found guilty faces a fine of up to 300 million yen (US$2.7 million) under the unfair competition law. Local media reported this month that prosecutors are not planning on seeking criminal charges against individuals.

The scandal also triggered a U.S. probe and three civil lawsuits, clouding the outlook for the 112-year-old firm even though no safety issues were reported by customers. President Mitsugu Yamaguchi told shareholders last month that talks with the U.S. Department of Justice were ongoing and that he didn’t know how long the investigation would last.

Kobe Steel closed 1.6% higher at 1,043 yen in Tokyo, leaving its shares 24% below the level seen before it revealed the scandal in October.

By Masumi Suga and Ichiro Suzuki

Popular Sponsored Recommendations

How Manufacturers Can Optimize Operations with Weather Intelligence

Nov. 2, 2023
The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

The Ultimate Ecommerce Excellence Checklist

Oct. 2, 2023
Scaling ecommerce operations is no easy task when your business is moving fast. Assess your current ecommerce maturity level and set optimization priorities with this practical...

Why DataOps may be the key to unlocking the full potential of digital transformation

Nov. 3, 2023
Read the 2023 market survey conducted by IndustryWeek

Four Keys To Operational Excellence

Sept. 20, 2023
As manufacturers face supply chain disruption and shrinking margins, increasing operations performance is critical. Our smart manufacturing guidebook can help you achieve the ...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!