Business / Corporate

Yamaguchi named Kobe Steel’s new CEO in wake of fake data scandal


Steel-maker Kobe Steel on Friday named a new CEO and pledged “fundamental reforms” in the wake of a scandal over fake strength and quality data it submitted to clients.

The firm said its board appointed Mitsugu Yamaguchi, currently Kobe Steel’s executive vice president, to the top role that was left vacant after Hiroya Kawasaki stepped down Tuesday.

“Under a new structure in the coming future, Kobe Steel intends to fulfill its responsibilities . . . along with restoring the trust of everyone as quickly as possible,” the company said in a statement.

“Kobe Steel will move forward with fundamental reforms to the organization and its corporate culture.”

As a preventive measure, the company has said it will abolish its chairman’s post and pick an external member to head its board meetings.

A Hokkaido native, Yamaguchi joined Kobe Steel in 1981 after graduating from Hokkaido University. He became executive vice president in April 2017.

Yamaguchi has mostly worked in the machinery sector that has had little involvement in the recent string of irregularities. Most of Kobe Steel’s past presidents had been named from its key steel division.

Kawasaki, who had been in the role since 2013, stepped down Tuesday after a long-awaited report into the scandal revealed the data falsification to have been more widespread than was initially thought.

The firm said false strength and quality data had been submitted for products sold to hundreds of clients worldwide.

The products affected by the scandal included steel wires used in car engines and tires, as well as aluminium used to manufacture bullet trains.

The firm, founded in 1905, has been at pains to stress there are no safety issues arising from the fake data. But the revelations were a fresh blow to the reputation of Japan Inc. after similar quality-control scandals hit industrial titans ranging from carmaker Nissan to Mitsubishi Materials.

Kobe Steel has vowed to overhaul its compliance procedures and internal structures, ensuring that a third of the board are independent external directors.

All company directors will have their pay docked by between 10 and 50 percent for a period ranging from one to four months.