Markets

Nikkei moves closer to 21-year high; Kobe Steel plunges

Nikkei moves closer to 21-year high; Kobe Steel plunges

The report says, Honda said it also used falsified material from Kobe Steel in vehicle doors and hoods, and Mazda Motor also confirmed it uses aluminum from the company.

In a report from Nikkei Asian Review, Kobe Steel who supplies aluminum for the automotive and airplane industry is said to have supplied false data about the strength and durability of its aluminum and copper products.

Kobe Steel said on Sunday the products were delivered to more than 200 companies but it did not disclose customer names. Products with falsified data were shipped to about 200 companies, the company said at the weekend.

- Mitsubishi Motors said it is confirming affected models as well as whether there's impact on auto safety. "We recognize that this breach of compliance principles on the part of a supplier is a grave issue". Nissan has already said aluminum hoods that fail to meet specifications could pose a risk to pedestrians during front-end collisions, while Toyota said the metal could have been used in some of its hoods and rear doors. The admission from the steel and aluminium maker follows similar scandals at Japanese companies including Nissan Motor, Mitsubishi Motors and Takata.

Shares in Kobe Steel fell by the daily limit of 300 points, the equivalent of 22 per cent, after the company admitted issuing product certificates that inaccurately met customer standards for shipments of aluminium and copper.

Mitsubishi Heavy Industries spokesman Genki Ono said Kobe Steel aluminium was used in the MRJ regional jet as well as the H-IIA rocket, which was launched by Japan Aerospace Exploration Agency on Tuesday for a satellite. The rocket cleared all safety checks before launch, the company said.

Kobe Steel said the misconduct involved dozens of staff and possibly stretched back 10 years. Kobe Steel's aluminum and copper operations account for about 20 percent of total sales, according to data for the quarter ended June 30.

"This is a serious matter that shakes the foundation of fair commercial transactions", said Yasuji Komiyama, director of the metal industries division of Japan's Industry Ministry.

"We want Kobe Steel to make the utmost effort to restore trust from society", he said.

Analysts say the announcement further tarnishes the reputation of Japan's globe-trotting manufacturers, long celebrated for their high-quality products.

The false data supplied to automakers was meant to make metals look like they met clients' quality standards.

"With a string of negative surprises at Kobe Steel lately, we believe investors are likely to distrust management even more due to this latest incident, despite emerging signs of earnings improvement in the steel and construction machinery segments", JPMorgan's Mori wrote.


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