Mitsubishi Materials shares plunge after it admits quality assurance failures

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Japan's latest scandal: Mitsubishi admits faking data

Shares in Mitsubishi Materials Corp yesterday plunged more than 8 percent after it admitted to falsifying product data, the latest major Japanese firm to acknowledge problems with quality control.

Mitsubishi Materials' subsidiaries falsified specification data before shipping some of its products to clients, the company said, adding that it is working with affected clients to ensure product safety.

Mitsubishi Materials closed 8.1 percent lower Friday, wiping nearly $400 million from its market value.

Mitsubishi Shindoh Co. fiddled with data on copper products, it said.

Mitsubishi Materials said that in both cases, it has not found any safety or legal problems.

Mitsubishi Materials has a 45-percent share in a copper tube joint venture with Kobe Steel, including the Hatano plant that is at the center of Kobe's data-falsification scandal.

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Mitsubishi Materials President Akira Takeuchi told a briefing in Tokyo on Friday that the company didn't disclose the problem when it reported earnings earlier this month because it wanted to find all of the customers affected. The company is part of the sprawling Mitsubishi group. Three of its units were found to have falsified data for products supplied to almost 300 companies in the aerospace, auto and electric power industries, the company said.

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".

They said the market mood was also soured by the latest scandal to hit Japan's manufacturing industry, involving Mitsubishi Materials Corp. It submitted a report to Japan's transport ministry on Friday. It now plans to strengthen and expand its quality control team.

"Even if Mitsubishi Shindoh and Mitsubishi Cable don't make up a big portion of the company's earnings, not just the short-term impact but the mid- and long-term impact on its orders is a cause of concern", Keiju Kurosaka, senior analyst at Mitsubishi UFJ Morgan Stanley Securities, said in a note.

Index heavyweigts rose, with SoftBank Corp9984.T gaining 1.4 percent and KDDI Corp9433.T advancing 2.6 percent.

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