Embattled Japanese steelmaker, Kobe, says it has lost customers to competitors because of widespread data falsification. As David Pollard reports, executives have now also admitted that the scandal extended to its mainstream steel sheet business.
Another bow, another apology .... As Kobe Steel says it's not only inspection procedures that have been slipping away ... But customers too. (SOUNDBITE) (Japanese) KOBE STEEL EXECUTIVE VICE PRESIDENT, NAOTO UMEHARA, SAYING: "Because we have forfeited our trust, I cannot say that there are no customers that have halted orders or switched suppliers. There are." They haven't been named as yet. But executives also admitted that already widespread data falsification had extended to its mainstream steel sheet business. And confessed Kobe had violated statutory standards - not just customer specifications. The steelmaker's share price sank further on the news. Adding to a 40 per cent slide in under two weeks that's wiped 1.6 billion dollars off the market value of the company. (SOUNDBITE) (Japanese) KOBE STEEL EXECUTIVE VICE PRESIDENT, NAOTO UMEHARA, SAYING: "Based on this case, we have decided to replace our internal quality investigation department to a third-party panel." Customers globally - including aircraft manufacturers and car makers - have scrambled to identify potential hazards in Kobe materials supplied to them. None so far have been reported. But in Europe this week, aviation authorities urged plane makers to avoid using Kobe products. And the US Justice Department launched a probe. The Japanese government too .... Now saying it'll take an 'active role' in getting to the bottom of the scandal .... One of Japan's heavy lifters sinking deeper into crisis.