February 2, 2018 / 10:37 AM / 2 months ago

UPDATE 1-Japan's Cosmo says petchem unit failed to properly inspect some products

* Maruzen Petchem likely shipped products in question to 121 firms

* Maruzen President says no impact to product quality, safety

* Revelation latest in scandals to rock Japan’s manufacturing (Recasts with formal announcement)

TOKYO, Feb 2 (Reuters) - Japan’s Cosmo Energy Holdings said on Friday its subsidiary, Maruzen Petrochemical Co, failed to properly inspect 30 percent of its products for petrochemicals and tyres, the latest quality assurance scandal involving a Japanese company.

Maruzen Petrochemical said it was involved in “inappropriate conduct regarding quality inspection” on 21 products such as propylene and benzene produced at its two factories.

It said it failed to conduct some of the tests and analysis on products that are outlined in contracts with customers.

Maruzen Petrochemical President Masaru Nabeshima told reporters the misconduct had no impact on quality or safety and that it has continued to supply products to customers.

The revelation is the latest in a slew of scandals to rock Japan’s manufacturing industry. Similar lapses have occurred at Kobe Steel and Toray Industries Inc, and incorrect final inspection procedures have been found at automakers Nissan and Subaru.

As of now, it does not appear that any laws have been broken, the company said. The products in question are likely to have been shipped to 121 corporate customers, it said.

President Nabeshima said the company would set up an internal investigative committee to make thorough checks on the issue and come up with measures to prevent their recurrence by around April.

Cosmo Energy Holdings has a 52.7 percent voting right in Maruzen Petrochemical. Other major shareholders include Ube Industries, Denka Co and JNC Corp.

A Cosmo Energy spokeswoman said some of the products in question had been manufactured by Maruzen’s naphtha cracker at its Chiba plant, adding that it had rectified the misconduct by late January. The revelation would not lead to a halt in manufacturing units operated by Maruzen or Cosmo, she said.

Shares in Cosmo Energy fell as much as 10 percent before closing down 2.5 percent, against a 0.9 percent decline in the Nikkei average. (Reporting by Osamu Tsukimori; Editing by Richard Pullin and Tom Hogue)

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