Kobe cheating scandal hits hundreds of companies worldwide


The government has urged Kobe Steel to clarify the extent of the misconduct. The official did not elaborate. The company is now investigating the practice, but says so far there have been no safety concerns.

A government spokesman told CNNMoney that the Ministry of Economy, Trade and Industry has ordered Kobe Steel "to report the result of safety checks within around two weeks, and conduct a thorough investigation of the reason for data fabrication and prevention measures within a month". Kobe Steel has no plans to sell assets at the moment, Kawasaki said.

Shares in Kobe fell nearly 40 per cent this week, wiping more than $1.6 billion off its value, after the company announced at the weekend that data on standards and quality control had been fabricated.

Planes, trains and automobiles - Kobe Steel's fake product data scandal has now touched every major form of transportation. Five-year credit default swaps were at 57 basis points on October 5 and last traded at 305 basis points on Wednesday.

The embarrassing scandal for Kobe Steel - a venerable firm that once employed Prime Minister Shinzo Abe - has already hit wide sections of Japanese industry, including automakers Toyota, Nissan and Honda which used the affected materials in their vehicles.

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General Motors said: "General Motors is aware of the reports of material deviation in Kobe Steel copper and aluminium products".

But it said most of those materials, used to deposit thin films from materials onto components such as computer chips, were reinspected and are thought to have met customers' specifications.

It also found one case of falsified data on iron powder products - material used for vehicle parts such as gears - that were shipped to a customer.

The Tokyo-listed firm fell nearly nine percent to end the morning at 805 yen ($7.20), down about 40 percent since the start of the week after it admitted falsifying strength and quality data for an array of products, a practice that may have started a decade ago. He criticized the apparently widespread falsification of data as "inappropriate". Conglomerate Toshiba Corp is still battling the fallout of a scandal over reporting inflated profits.