Saturday 15 December 2018

Kobe Steel chief steps down over massive fake data scandal

Hiroya Kawasaki is quitting over the scandal that surfaced last year involving massive falsification of inspections data of the company’s products.

Japan Steel Scandal
Japan Steel Scandal

By Yuri Kageyama, Associated Press

The chief executive of Japanese manufacturing giant Kobe Steel is stepping down over a scandal that surfaced last year involving massive falsification of inspections data of the company’s products.

Hiroya Kawasaki, who is also chairman and president, said on Tuesday that he is stepping down from all three roles.

He will stay on as a director but only until the annual shareholders’ meeting in June.

His successor has not yet been named.

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Japan Steel Scandal

Kobe Steel has pointed to a zealous pursuit of profit, unrealistic targets and an insular corporate culture as behind the scandal.

There have been no accidents or injuries related to the fake data.

But the systematic misconduct spanned years, affecting products sent to more than 680 companies, including aluminium castings and copper tubes for autos, aircraft, appliances and trains.

Executive vice president Akira Kaneko, in charge of the aluminium and copper business, also resigned.

Takumi Fujii and Nobuaki Isono, managing executive officers in the aluminium and copper operations, the main areas where the misconduct took place, were fired. Two directors at group companies were also dismissed.

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Japan Steel Scandal

All directors, except for outside directors and auditors, were slapped with pay cuts of between 10% and 50% for a period ranging from one month to four months, the company said.

The scandal is an embarrassment for Japan, which for decades prided itself on its discipline, craftsmanship and attention to detail.

Quality control woes have also surfaced recently at other top Japanese brands, including at Nissan. The car giant has acknowledged that illegal vehicle inspections occurred for years at its plants in Japan.

Kobe Steel said executives had been aware of the problem but looked the other way.

Two executives involved in the misconduct neither reported it to the board nor took action to correct the wrongdoing, according to a company report released on Tuesday.

The company pointed to inadequate corporate governance, low awareness about quality controls and shoddy quality control procedures as root causes of the scandal.

In October, Kobe Steel reported 525 cases of misconduct. An investigation that followed found another 163 cases, including falsification of data for aluminium sheets and copper tubes.

Press Association

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