Japan's Ministry of Economy, Trade and Industry has urged Kobe Steel to report back on product safety within two weeks and also draw up fraud prevention measures by mid-November, a ministry official said Thursday.
Kobe Steel's President Hiroya Kawasaki visited the ministry Thursday to voluntarily report the findings and measures taken after the company reported on September 28 that inspection data on aluminum and copper products had been fabricated.
Kawasaki met with Akihiro Tada, director general of the Manufacturing Industries Bureau, which is under METI.
Tada asked to confirm safety of Kobe Steel products first, possibly within two weeks, and identify causes, draw up preventive measures, and be ready to implement them in a month.
Kobe Steel is conducting a corporate-wide fraud survey including overseas plants and offices.
"There is a need to approach this issue speedily," Yasuji Komiyama, director of the metals industries division, said at a press conference. Komiyama was present at Kawasaki's meeting with Tada.
Falsification of inspection data, or improper conduct, as Kobe Steel says, was not a violation of Japanese law, Komiyama said. In Japan, companies are not required to obtain government licenses to be in aluminum business and are not regulated.
"They are affairs between private businesses. It is up to the parliament to decide whether a new regulation is needed," he said.
"But the government takes this very seriously. This has a major impact on our society, shaking the foundation of fair business practices. We are concerned because similar improper conduct has been repeated, managers were involved, and there is widespread impact on Kobe Steel's customers across industries," he added.
Kobe Steel said roughly 200 companies that bought aluminum and copper products were affected by the fake inspection data, as well as 70 companies buying iron powder.
The 200 companies include China-based plants of Mercedes-Benz and General Motors, Japanese automakers, and other transport vehicle manufacturers among others, Kawasaki told reporters separately.
"Safety is a priority. We have asked Kobe Steel product users to cooperate, to conduct safety checks. Overseas companies may be asked to extend cooperation as the safety of end-users is important. METI is not working with other governments currently but we will work with overseas regulators if there is a need," Komiyama said.
Meanwhile, Kawasaki confirmed that some aluminum and copper shipments had been suspended after the management learned about the fake data. The suspended shipments accounted for around 4% of aluminum and copper sales of around Yen 300 billion ($2.7 billion) annually, he added.
No customer had canceled contracts with Kobe Steel nor any lawsuits filed, he said. Neither had automakers recalled any cars as a result of the fabricated data, he added.
Steel and machinery divisions were not caught in the issue, he said. Asked how Kobe Steel defined safety, Kawasaki said: "Safety is whether our products meet the specifications of our customers."
