Kobe Steel Ltd (KBSTY) said Tuesday that the U.S. Department of Justice has requested documents related to its ongoing data falsification scandal that reports indicate may have begun more than a decade ago.
The company said it would co-operate with U.S. authorities in the probe, which has impacted some 500 customers of Japan's third-largest steel company, including automakers Ford Motor Co. (F) and General Motors (GM) as well as planemaker Boeing Co. (BA) as the scandal deepens.
"Kobe Steel USA Inc., a U.S. subsidiary of Kobe Steel, Ltd. received a document from the U.S. judicial administrative authority requesting the production of documents related to non-conformity with the specification of products sold by the Company, the U.S. subsidiary or our affiliated companies to U.S. customers," Kobe Steel said in a statement. "The Company and its subsidiaries will sincerely cooperate with the investigation."
"The effect this incident will have on the Company's business performance is unclear at this time," the statement added. "The Company plans to make another announcement when the extent of the impact becomes clear."
Japan's Nikkei business daily said earlier this week that data control issues related to the quality of its steel, copper and aluminium shipments were picked found as far back as 2007 as part of the company's probe into the scandal. Around 500 of the company's customers have been impacted, the company has admitted, although none have reported safety concerns or sought resale agreements.
Kobe Steel shares closed at ¥853.00 each in Tokyo Tuesday after rising around 3.14% on the session amid reports that its near-term liquidity position hasn't been impacted. However, it has nonetheless lost around 37% of its market value since the news of the scandal was first revealed on Oct. 6.
"A portion of the products traded with customers did not comply with the product specifications which were agreed between the Company and its customers," the company said in a statement at the time. "Data in inspection certificates had been improperly rewritten etc., and the products were shipped as having met the specifications concerned."
"Causing this serious matter has brought overwhelming shame to the Company ... (Kobe) deeply regrets this incident and sincerely apologizes for the enormous worry and trouble this incident has caused to its customers and other related parties."
Kobe first said about 4% of shipments between September 2016 and August 2017 were impacted by the scandal, which was discovered by what it called an "emergency quality audit", but admitted the falsifications may have occurred over a period of ten years. It later admitted falsifying quality control data on nine other products.
The group's steel and aluminium division had sales of ¥323.3 billion ($2.9 billion) in its last financial year, which ended in March, and has about 200 customers.
The scandal, which is the latest in a series of corporate misdeeds from within the world's second-largest economy, could have implications for automakers and aerospace firms and could lead to recalls for the country's car industry after the Transport Ministry called for deeper safety checks in the wake of the revelations.
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