Kobe Steel

The chief executive and other senior executives have stepped down from Japanese company Kobe Steel following the publication of the report outlining the findings of an investigation into the data falsification that the company admitted to in October last year.

The investigation uncovered 163 more customers since October that had received metal products which did not meet its product specifications having revealed then that 525 customers. The company had covered this us by rewriting inspection certificates with inaccurate data.

Kobe Steel
Kobe Steel admitted to falsifying data on its metal products including copper tubes

The aluminium & copper business within Kobe Steel was found to be the only division where executive officers were involved in the misconduct. The investigation found that two executive officers were aware of the data falsification, but failed to report it to their superior who was the then head of the aluminium & copper business.

Hiroya Kawasaki, chairman, president and chief executive at Kobe Steel and Akira Kaneko, its executive vice chairman are to step down from their positions at the beginning of April and will stop serving as after the company annual general meeting in June. Company executive officers Takumi Fujii and Nobuaki Isono and chief executives at two Kobe subsidiaries – Yutaka Masuno, head of Kobelco & Materials Copper Tube Company and Hiroyuki Ando boss of Shinko Metal Products were all dismissed from the company. Meanwhile, executive officer, Seiji Hirata, has had his pay reduced by 80% for four months and all its other executive directors and executive officers will have 10% to 50% of their pay cut for a period ranging from one month to four months.

The investigation has blamed the misconduct on poor corporate governance and a company style that overemphasised profitability;  the imbalanced operation of plants that resulted in the reduced awareness of quality compliance among employees, and the insufficient quality control procedures that allowed the misconduct to take place.

Kobe said it would be working to ensure this misconduct is not repeated through a range of measures including better staff engagement and training; by appointing a non-executive chairman and ensuring a third of the board are on-executive directors and by conducting a compliance awareness survey on a regular basis, and by strengthening the risk management of group companies based on Kobe’s standards.

The original misconduct was uncovered after Kobe conducted self-inspections and audits from April last year. Following the original discovery, the company immediately ceased shipping products affected by the misconduct. Kobe added that since then it had worked diligently on safety verification in close cooperation with its customers. To date, it had not encountered any case in which its customers or the company needed to cease using or recall products immediately.

Last Updated: 9 March 2018
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