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Kobe Steel's cheating engulfs more divisions

Friday, October 13, 2017 - 01:40

The crisis at Kobe widens as the Japanese firm admits it has also falsely labelled products from its steel divisions. As David Pollard reports, sources have told Reuters that Boeing is among Kobe clients to have used the falsely certified products.

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1.8 billion dollars has been wiped off Kobe's market value in recent days ... This already an expensive scandal. But one that could be about get much more so. (SOUNDBITE) (Japanese) KOBE STEEL'S CEO, HIROYA KAWASAKI, SAYING: "We haven't received any requests for a specific amount of compensation, but we do have plans to talk with our users about the cost." One operator of Japan's 300 kilometre an hour bullet trains says it will seek compensation. While in the US, sources tell Reuters that Boeing has used falsely certified products. (SOUNDBITE) (English) JEREMY STRETCH, HEAD OF G10 FX STRATEGY, CIBC, SAYING: "If .... you've had wings made out of aluminium which could have been falsely accredited then clearly that is a major structural and safety issue ... If the companies have that doubt then certainly their consumers will also do so." Boeing is reported not as yet to believe there are safety concerns. But the airworthiness of Kobe's share price is even more at risk - after another plunge on Friday. This time, by nine per cent - raising fears of a Japanese-style dieselgate. SOUNDBITE (English) SWISSQUOTE BANK HEAD OF MARKET STRATEGY, PETER ROSENSTREICH, SAYING: "You have a significant situation where that 30 percent immediate drop in Volkswagen followed by about a 40 percent decline overall in Volkswagen stock will be something very similar to what we could see in Kobe Japan." In all, 500 companies have been supplied with affected materials. Kobe now disclosing a range of other products as falsely labelled. Daimler and Airbus are reportedly amongst those concerned. As is Tokyo Electric Power. It's taken delivery of Kobe pipes for its Fukushima nuclear plant. In a scandal fast gaining critical mass.