Business / Corporate

Toray latest in slew of Japanese firms to admit falsifying data

by Kazuaki Nagata

Staff Writer

More corporate misconduct by yet another major Japanese firm emerged Tuesday as Toray Industries Inc. said its group falsified quality test data.

Toray Hybrid Cord Inc., an Aichi-based subsidiary of Toray and maker of tire and other industrial reinforcement cords, said it identified 149 cases out of 40,000 in which two employees in charge of quality assurance modified figures.

In these cases, which occurred between 2008 and 2016, the strength of the materials did not meet the standards promised to customers.

The products include tire and vehicle hose reinforcement cords as well as cords used during a paper manufacturing process. The leading Japanese textile maker said the misconduct affects 13 companies but stressed that the doctored figures were close to the quality standards, so the products pose no safety or functional risks.

The firm said the two workers had consistently poor compliance in meeting promises with customers, so they altered the figures to meet the standards.

Toray President Akihiro Nikkaku said the firm has been investigating its other business groups and there are 137 other suspicious cases. He said the probe is close to an end.

Nikkaku said the firm plans to implement measures including a computerized data management system for product quality to prevent data tampering.

“We are taking this issue very seriously,” Nikkaku said during a news conference at the firm’s headquarters in Tokyo.

“I’m profoundly sorry for causing so much trouble,” he said. “In the next three years, we are committed to creating a product quality data system that won’t allow misconduct” and make sure that its workers won’t make the same mistake.

Toray said it discovered the data falsification in July last year.

But it did not prepare to go public until earlier this month when the firm noticed an internet post regarding the misconduct and received some inquiries.

Nikkaku said it thought it would be better for his company to address the issue openly rather than let rumors run rampant.

Data falsification problems that have recently dogged other major companies, such as Kobe Steel Ltd. and Mitsubishi Materials Corp., prompted Toray to disclose its case as well, he said.

Had there been no internet post and scandals by other companies, Toray would not have announced the case publicly, since the misconduct did not violate related laws or jeopardize safety, Nikkaku said, adding that the firm would have informed its client companies to square the issue.

After the announcement, Toray’s shares plummeted 5.3 percent to close Tuesday trading at ¥1,046 on the Tokyo Stock Exchange.

Toray is known as a textile and material supplier to companies like Uniqlo and Boeing, and its former president, Sadayuki Sakakibara, currently serves as chairman of Keidanren, one of Japan’s largest business lobbies.

Nikkaku said products for Uniqlo and Boeing are unaffected by the scandal.