December 8, 2017 / 6:41 AM / in 8 days

Kobe Steel loses JIS certifications, faces lawsuits in Canada

TOKYO (Reuters) - Kobe Steel Ltd (5406.T) said on Friday it has been hit with lawsuits over its data tampering scandal and has had two more badges of industrial quality removed, the latest setbacks for the Japanese steelmaker as it seeks to restore its reputation.

The class-action lawsuits lodged in courts in Canada are the first legal actions against the company since it announced the cheating in October, while the removal of Japanese Industrial Standards (JIS) certifications may cost it customers.

Four individuals in Canada who bought cars that use the company’s products filed lawsuits seeking unspecified damages against Kobe and subsidiaries at the Supreme Court of British Columbia and the Ontario Superior Court of Justice, Japan’s third-largest steelmaker said.

Three residents of British Columbia and one person residing in Ontario filed the claims that allege they were overcharged for the vehicles and suffered economic losses as a result of the scandal, Kobe Steel said. Proceedings have not started.

“We anticipate that in the future similar lawsuits will be filed against the Kobe Group or the other affiliated group companies,” the company said.

Kobe Steel said it cannot estimate how much the lawsuits will cost or fully calculate the potential financial impact of the scandal. It earlier withdrew a forecast for its first full-year profit in three years.

Kobe is also being investigated by the U.S. Department of Justice, and some of its customers have said they will seek to recoup costs from making checks and replacing parts that did not meet specifications.

The steelmaker supplies metal to manufacturers of cars, planes, trains and other products across the world. It has said that more than 500 of its customers have received products with falsified specifications on strength and durability, in one of Japan’s biggest industrial scandals.

No safety issues have been identified so far. Kobe Steel also said on Friday that no products have required recall.

Kobe Steel’s Shinko Metal Products unit has had its JIS certifications revoked for copper and copper alloy seamless pipes because of quality management issues at the plant, the company said on Friday.

    JIS certifications were also suspended at its Moka aluminium and aluminium alloy plant north of Tokyo.

    The company said earlier this week it had JIS certifications suspended at its aluminium extrusion plant in Chofu and revoked at its Hatano plant.

    The removal of the quality badges means Kobe may not be able to sell some of its products to customers.

    Kobe Steel said that despite losing the JIS certification, it can supply products that are equivalent to the standards in quality if customers accept them.

    The company said it would aim to regain JIS certification at those plants in the future.

    The company’s shares, which have fallen by nearly a quarter since the scandal broke, rose 0.2 percent on Friday.

    Reporting by Osamu Tsukimori; Writing by Aaron Sheldrick; Editing by Christian Schmollinger and Tom Hogue

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