Kobe Steel Ltd., Japan's third-largest steelmaker, has been embroiled in a major data fraud scandal that has shaken the reputation of Japanese manufacturing. The company, also known as Kobe Steel Co., Ltd., admitted for the first time that senior executives were aware of the misconduct. An independent investigator hired by the firm found that top officials in the copper and aluminum divisions had knowledge of some fraudulent activities.
Three senior executives—Takumi Fujii, Nobuaki Isono, and Seiji Hirata—have been removed from their roles due to their awareness of the wrongdoing. They are now serving as assistant directors in the aluminum and copper departments, no longer managing their previous responsibilities. Meanwhile, Akira Kaneko, the executive vice president and head of the aluminum and copper division, was not informed about the fraud by these three individuals.
The scandal, which has been ongoing for over a decade, has affected more than 500 companies across various sectors, including automotive, aerospace, defense, and electronics. The Nikkei Asia Review reported that Kobelco will wait for the full investigation report from an external legal committee before making final disciplinary decisions. The timeline for the investigation has been extended to February next year.
In October, Kobelco finally acknowledged the fraud, leading to widespread concern. At a press conference, Naoto Umehara, executive vice president, stated the company is taking the issue seriously. However, he denied any direct instructions from top management and claimed the situation was not a result of corporate culture. Former employees later revealed internal memos detailing how to falsify data while avoiding detection.
Kobelco, founded in 1905, now faces investigations from both the U.S. Department of Justice and the European Aviation Safety Agency (EASA), which has advised airlines to avoid purchasing from the company. The firm’s products have also lost JIS certification in several cases.
As of mid-November, 437 out of 525 affected customers confirmed no safety issues, though 88 remain unverified. No recalls have been issued yet. The scandal has severely damaged the image of Japanese manufacturing, with other companies like Mitsubishi Materials and Toray Industries also facing similar allegations. This wave of fraud has raised serious concerns about quality control and corporate accountability in Japan.
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