Kobe Steel has now admitted irregularities even in its steel wire production outside Japan, and speculation that the company may need to split up is increasing.
Kobe Steel will compensate its customers for the costs related to steel fraud, reports Hiroya Kawasaki, chairman of the board at a press conference.
According to the company, about 500 companies will be affected, none of them have yet claimed compensation for the damages.
Earlier, in the beginning of October, it was revealed that the company was cheating on quality controls, for example in the case of aluminum and copper products, and the stock has subsequently tampered with the Tokyo Exchange.
The new information "indicates that this is a result of the company's culture and not just something that some shameful employees were dedicated to", writes research firm Bucephalus in an email to Bloomberg News and asks if it happened as a way to save money or whether it was just about not being able to produce what was ordered in the right quantity.
Kobe Steel announced a Swedish acquisition in April, when Västerås company Quintus Technologies, which develops and manufactures sheet presses, was bought for the equivalent of SEK 930 million from the US venture capital company Milestone Partners. The company was founded in 1940 and was previously part of ABB.
However, supply and demand for the broader steel market is not particularly affected, according to market sources for Metal Bulletin.
- There have been no fundamental changes in supply and demand at the moment. It remains to be seen how the company manages this, and so far there are no clear indications of how this may change the market," the industry news media quotes a not named industry source in Singapore.
