Mitsubishi Materials shares fall after firm says units falsified product data

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Shares of Mitsubishi Materials Corp plunged as much as 11 percent on Friday, the lowest since August, after the firm said its subsidiaries had falsified product data, the latest in a series of quality assurance scandals involving Japanese manufacturers.

Mitsubishi Materials said that inspection data was falsified on parts used in aircraft, automobiles and industrial machinery, with more than 250 customers potentially affected.

Japanese Trade and Industry Minister Hiroshige Seko called the misconduct “a betrayal of trust in Japanese manufacturing,” pointing to the amount of time the company took to reveal the wrongdoing.

Mitsubishi Materials said on Thursday that data falsification at one subsidiary, Mitsubishi Cable Industries Ltd, was discovered in February.

The unit distorted data on around 20 percent of its rubber sealing products, used in aircraft and cars, for two-and-a-half years from April 2015.

Another subsidiary, Mitsubishi Shindoh, manipulated data for metal products, used in cars and electronics, going back to October 2016.

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

In both cases the company said it had not found any safety or legal problems and has informed 54 of the 258 customers potentially affected.

The Nikkei business daily reported a third subsidiary, Mitsubishi Aluminum Co Ltd, also had shipped products out of specification. A company spokesman for both parent and subsidiary declined to confirm this.

With affected Mitsubishi Materials products used in defense equipment including aircraft engines, Japan’s defense ministry is working to establish the impact of the wrongdoing but does not currently plan to stop using any equipment, Defense Minister Itsunori Onodera said on Friday.

The news comes after Kobe Steel Ltd, Japan’s third-biggest steelmaker, admitted in October that workers had tampered with product specifications, forcing companies around the world to check the safety of their products.

Source(s): Reuters