Kobe Steel faces class-action lawsuits in Canada

Along with this barrage of canon fire, Japan’s third largest steelmaker is also facing the loss of 2 Japanese Industrial Standards (JIS) badges, which is likely to impact its ability to sell its products to customers.

Class-action lawsuits have been lodged in Canadian courts in the latest volley to hit embattled Japanese steelmaker Kobe Steel over its data fabrication scandal.

In yet another setback, the steelmaker also had two badges of Japanese Industrial Standards (JIS) removed the result of which is likely to cost its customers.

Four individuals in Canada who bought cars that uses the company’s products have filed lawsuits against the company seeking unspecified damages against it and its subsidiaries at the Supreme Court of British Columbia and the Ontario Superior Court of Justice.

In their complaint, the 3 residents of British Columbia and 1 person residing in Ontario have charged Japan’s third largest steelmaker of overcharging for the vehicles and said they have suffered economic losses as a result of the scandal, said Kobe Steel.

Proceedings against the company have yet to start.

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

Kobe Steel stated it cannot, yet, estimate how much these lawsuits will cost the company or fully calculate the potential financial implications of the scandal.

The company has withdrawn its full year profit forecast, a first in the last three years.

The U.S. Department of Justice and some of its customers are also investigating Kobe Steel with both parties intending to recoup costs from making checks and replacing parts that did not meet specifications.

Kobe Steel’s products are used extensively by carmakers, airplane and train manufacturing company as well as in other products across the globe. The company has stated, more than 500 of its customers have received its products with falsified specifications on strength and durability. However, safety issues have yet to be identified, so far.

On Friday, Kobe Steel stated no products have required recall.

The removal of quality badges is likely to impact Kobe Steel’s efficacy to sell some of its products to customers.

According to the company, it can however continue to sell its products, despite losing the JIS certifications, provided its customers accept its products that are of equivalent standard to the JIS certifications.

Kobe Steel has said, it aims to regain JIS certification in the future.

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