Kobe Steel says lack of quality controls, focus on profits to blame for data tampering

Chief Executive Officer Hiroya Kawasaki submitted the internal report on Friday to Akihiro Tada, director general of METI’s manufacturing industries bureau, before releasing the report publicly. (Reuters)
Updated 10 November 2017
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Kobe Steel says lack of quality controls, focus on profits to blame for data tampering

TOKYO: Kobe Steel said on Friday a lack of quality controls and a focus on profits was behind the widespread data tampering that has shaken up the supply chains of car and plane makers around the world.
Japan’s third-largest steelmaker, which has posted losses in the last two business years, promised to automate more of its operations and reorganize its quality control systems to recover from one of the nation’s biggest corporate scandals.
The 112-year-old company admitted last month that workers had tampered with product specifications for at least a decade, causing global automakers, aircraft manufacturers and other companies to check whether the safety or performance of their products had been compromised.
No safety issues have so far been identified from the data cheating, which mainly involves falsely certifying the strength and durability of products.
Kobe Steel was ordered by the Ministry of Economy, Trade and Industry (METI) last month to provide a detailed explanation of the data cheating and say what steps it would take to prevent future abuses.
Chief Executive Officer Hiroya Kawasaki submitted the internal report on Friday to Akihiro Tada, director general of METI’s manufacturing industries bureau, before releasing the report publicly.
“Clarifying your company’s thinking on the causes of this incident is a meaningful step toward restoring trust,” Tada told Kawasaki as he arrived to deliver the report. “I look forward to getting a proper explanation.”
The company also appointed a trio of outside investigators who are due to report back by the end of the year. Sources have said that Kawasaki and other executives will decide whether to resign for the scandal happening on their watch only after the external report.
“Given the magnitude of the scandal, we expect upper management to get the boot,” Thanh Ha Pham, an analyst at Jefferies in Tokyo, wrote in a note on Friday, without saying when that might happen.
Kobe Steel, also subject of a US Justice Department inquiry as well, has had a Japanese government-sanctioned seal of quality revoked on some of its products and lost customers.
As of Friday, the company said 474 out of 525 affected customers found no safety issues or their products were deemed safe by Kobe Steel, up from 470 earlier this week.
The company has said it cannot yet fully state what impact the tampering will have on its finances. Last week, it pulled its forecast for its first annual profit in three years for the 12 months through next March.
Kobe Steel’s shares have fallen by nearly a fifth since it revealed the data fabrication a month ago.


Indian rupee, bonds slump after cenbank governor’s resignation

In this file photo taken on April 1, 2014, the Reserve Bank of India (RBI) logo is seen on the main entrance gate of the RBI headquarters in Mumbai. (AFP)
Updated 11 December 2018
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Indian rupee, bonds slump after cenbank governor’s resignation

  • The RBI governor resigned abruptly after a months-long tussle over policy with the government

MUMBAI: India’s rupee and bonds plunged following Reserve Bank of India Governor Urjit Patel’s unexpected resignation after market hours on Monday shocked investors.
Concerns about likely mixed results from crucial state elections later on Tuesday also kept traders wary.
The Indian rupee came off earlier lows at 72.1350 to the dollar after opening at 72.46, but was sharply lower from its close of 71.35 on Monday.
The 10-year benchmark bond yield rose to 7.64 percent from 7.59 percent at the previous close.
The broader NSE stock index opened down 1.3 percent but recovered some of its losses and was 0.9 percent lower.
Investors will await state election results for further trading cues during the day.
The RBI governor resigned abruptly after a months-long tussle over policy with the government that has raised concerns about the central bank’s independence as a national election nears.