Mitsubishi Materials says units falsified product data

  • Mitsubishi Materials says units falsified product data

Mitsubishi Materials says units falsified product data

Mitsubishi Materials said it stopped shipping affected materials from the two units in October.

Mitsubishi Cable Industries falsified data on rubber seals, while Mitsubishi Shindoh misreported the strength of metal strips for auto parts, according to a statement Thursday.

Mitsubishi Materials Corp5711.T dived 8.1 percent after the company said its subsidiaries had falsified data.

A third unit, Mitsubishi Aluminum, also supplied products that didn't meet standards, although it has already told customers that the products are safe, the company said, adding that its investigation hasn't uncovered any cases that raise the possibility of legal violations or safety issues. That joint venture includes the Hatano plant that has become the focus of Kobe Steel's data falsification scandal, and been stripped of numerous Japanese and worldwide quality certifications.

Confidence in Japan's manufacturing prowess has also taken a hit from recent revelations that automakers Nissan and Subaru had failed to comply with final inspection procedures for decades.

Markets were closed on Thursday for a national holiday. It did not know whether there would be any impact on its financial outlook, it said.

The company reported to the transport ministry around midday today, a ministry spokesman said.

Minister of Economy, Trade and Industry Hiroshige Seko on Friday said the latest misconduct was "a betrayal of trust in Japanese manufacturing", pointing to the amount of time Mitsubishi Materials took to reveal the wrongdoing. Around half of 29 potentially affected customers have been informed.

Kobe Steel's crisis erupted in early October, collapsing its shares. That has allowed its stock to recover some of its losses.

Mitsubishi has promised that it will rectify all the mistakes in the production and improve its quality control to make sure the issues do not get repeated again. The company was forced to abandon its profit forecasts and has lost quality assurance certification - often demanded by customers as a condition of sale - at seven of its 20 plants.

Mitsubishi Materials said shipments of the non-conforming products were halted late last month.

Other manufacturers such as Boeing Co, Toyota Motor Corp, Honda Motor Co Ltd, Mitsubishi Heavy Industries Ltd and Nissan said they were looking into the issue, company spokespeople confirmed.

"Even if Mitsubishi Shindoh and Mitsubishi Cable don't make up a big portion of the company's earnings, not just the short-term impact but the mid- and long-term impact on its orders is a cause of concern", Keiju Kurosaka, senior analyst at Mitsubishi UFJ Morgan Stanley Securities, said in a note.

Index heavyweigts rose, with SoftBank Corp9984.T gaining 1.4 percent and KDDI Corp9433.T advancing 2.6 percent.