Kobe Steel names new CEO after fake data scandal

Kobe Steel has vowed a turnaround in its business practices
AFP

Tokyo (AFP) – Japanese steelmaker Kobe Steel named a new CEO on Friday and pledged “fundamental reforms” in the wake of a scandal over fake strength and quality data it submitted to clients.

The firm said its board had appointed Mitsugu Yamaguchi, currently Kobe Steel’s executive vice president, to the top role left empty after Hiroya Kawasaki stepped down on Tuesday.

“Under a new structure in the coming future, Kobe Steel intends to fulfil its responsibilities… along with restoring the trust of everyone as quickly as possible,” the company said in a statement.

“Kobe Steel will move forward with fundamental reforms to the organisation and its corporate culture.”

Kawasaki, who had been in the role since 2013, stepped down on Tuesday as a long-awaited report into the scandal revealed the data falsification was more widespread that initially thought.

It said false strength and quality data had been submitted for products sold to hundreds of clients worldwide.

The products affected by the scandal included steel wires used in car engines and tyres, as well as aluminium used to manufacture Japan’s famous bullet trains.

The firm, founded in 1905, has been at pains to stress there are no safety issues arising from the fake data.

The revelations were a new blow to the reputation of Japan Inc after similar quality-control scandals hit industrial titans ranging from carmaker Nissan to Mitsubishi Materials.

Kobe Steel has vowed to overhaul its compliance procedures and internal structures, ensuring a third of the board are independent outside directors.

All company directors will have their pay docked by between 10 and 50 percent for a period ranging from one to four months.

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