Chief executive of Japan’s Kobe Steel has resigned after a data falsification scandal.
Hiroya Kawasaki said he would step down, as the firm released a long-awaited report into the alleged fraud. It confirmed that staff had changed or made up data on the quality of some of its products before they were shipped.
According to Reuters, Kobe Steel had “deep-seated issues” around corporate culture and compliance, the report admitted.”For over 112 years since its founding, the Kobe Steel group has managed its business and has conducted its business by valuing the trust of its customers,” it said.
“The recent loss of such trust is truly regrettable.” Kobe Steel is Japan’s third-largest steelmaker, and supplies manufacturers of cars, planes, trains and other products around the world. Manufacturers such as General Motors, Boeing and Toyota have been investigating whether they have used any of the sub-standard materials – though no safety issues have yet been reported. Kobe Steel is just one in a string of major Japanese companies to be mired in scandal. They include cases of falsified data at Nissan Motors, Subaru and Mitsubishi Motors.
Anatomy of a scandal: Kobe said the departure of Mr Kawasaki, as well as executive vice president Akira Kaneka, reflected “the company taking to heart the troubles we have caused our customers, suppliers, shareholders and many other people in connection with the misconduct that took place”.
Mr Kawasaki personally apologized in a media conference for the scandal, which first emerged in October last year. He said he would leave his post on 1 April and allow a new leadership to make reforms. Other details included in the report include: There were a total of 688 cases of “misconduct” – 525 announced when the problem was first revealed in October last year and 163 fresh cases.
The firm had a management style that overemphasized profitability, and had inadequate corporate governance. Two executives in the firm’s aluminum and copper division knew of the data-falsifying but did nothing? They have been fired. Kobe said measures being put in place to try to prevent a repeat of the scandal included:
A shake-up of the board, including one third of directors now coming from the outside. Rotating staff around the firm to make it less “insular”.
Making every October a “core value month” to remember the lessons learned.
