Kobe Steel scandal expands to engines and tires

5:09 am JST																Kobe Steel cheating scandal goes global					Daimler Airbus GE among the 30-plus victims beyond Japanese shores

Investors, anxious about the financial impact and legal fallout, have wiped out about $1.8 billion off Kobe Steel's market value this week after the firm said about 200 companies were affected by its cheating.

Kobe Steel, Japan's third-largest steelmaker, earlier this week hit the automotive industry with a bombshell when the company admitted that it falsified data about the integrity of some aluminum and copper products used to make cars, planes and trains.

"The Kobe Steel crisis is definitely helping other steel producers", Wunderlich Securities chief market strategist Art Hogan said.

"The company deeply regrets this incident and sincerely apologizes for the enormous worry and trouble this incident has caused to its customers and other related parties", Kobe Steel said in a news release.

The scale of the misconduct at Japan's third-largest steelmaker pummelled its shares as investors, anxious about the financial impact and legal fallout, wiped about $1.8 billion off its market value this week.

Boeing has some of the falsely certified products, a source with knowledge of the matter told Reuters, while stressing that the world's biggest maker of passenger jets does not consider the issue a safety problem.

Daimler and PSA Group denied a Nikkei report on Friday that they had received materials with falsified data from Kobe Steel.

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No safety issues have yet been identified in the unfolding imbroglio.

The head of Japan's Kobe Steel (Other OTC: KBSTF - news) warned Thursday that a quality control scandal engulfing his firm was likely to widen at home and overseas, as he acknowledged that trust in the steelmaker has "fallen to zero".

Kobe Steel shares fell almost nine per cent on Friday and have fallen more than 40 per cent since the scandal broke.

The head of Japan's number three steelmaker said Thursday that his firm was checking with more Japanese clients as well as foreign buyers including General Motors (NYSE: GM - news).

"We can not rule out the possibility that this will shake Kobe Steel to its foundation".

Asked about the status of the Kobe contract with Safran, an Airbus spokeswoman said its investigation was continuing.

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