Japan's Cosmo says petchem unit failed to properly inspect some products (updated)

Denka

02/02/2018 10:37

* Maruzen Petchem likely shipped products in question to 121 
firms 
    * Maruzen President says no impact to product quality, 
safety 
    * Revelation latest in scandals to rock Japan's 
manufacturing 
 
 (Recasts with formal announcement) 
    TOKYO, Feb 2 (Reuters) - Japan's Cosmo Energy Holdings 
 5021.T  said on Friday its subsidiary, Maruzen Petrochemical 
Co, failed to properly inspect 30 percent of its products for 
petrochemicals and tyres, the latest quality assurance scandal 
involving a Japanese company.  
    Maruzen Petrochemical said it was involved in "inappropriate 
conduct regarding quality inspection" on 21 products such as 
propylene and benzene produced at its two factories.  
    It said it failed to conduct some of the tests and analysis 
on products that are outlined in contracts with customers.  
    Maruzen Petrochemical President Masaru Nabeshima told 
reporters the misconduct had no impact on quality or safety and 
that it has continued to supply products to customers.  
    The revelation is the latest in a slew of scandals to rock 
Japan's manufacturing industry. Similar lapses have occurred at 
Kobe Steel  5406.T  and Toray Industries Inc  3402.T , and 
incorrect final inspection procedures have been found at 
automakers Nissan  7201.T  and Subaru  7270.T .  urn:newsml:reuters.com:*:nL3N1NY09K 
 urn:newsml:reuters.com:*:nL4N1OJ2HI  
    As of now, it does not appear that any laws have been 
broken, the company said. The products in question are likely to 
have been shipped to 121 corporate customers, it said.  
    President Nabeshima said the company would set up an 
internal investigative committee to make thorough checks on the 
issue and come up with measures to prevent their recurrence by 
around April.  
    Cosmo Energy Holdings has a 52.7 percent voting right in 
Maruzen Petrochemical. Other major shareholders include Ube 
Industries, Denka Co  4061.T  and JNC Corp.  
    A Cosmo Energy spokeswoman said some of the products in 
question had been manufactured by Maruzen's naphtha cracker at 
its Chiba plant, adding that it had rectified the misconduct by 
late January. The revelation would not lead to a halt in 
manufacturing units operated by Maruzen or Cosmo, she said.  
    Shares in Cosmo Energy fell as much as 10 percent before 
closing down 2.5 percent, against a 0.9 percent decline in the 
Nikkei average  .N225.T .  
 
 (Reporting by Osamu Tsukimori; Editing by Richard Pullin and 
Tom Hogue) 
 ((osamu.tsukimori@thomsonreuters.com, +813 6441 1857, Reuters 
Messaging: osamu.tsukimori.thomsonreuters.com@reuters.net;)) 
 
Keywords: JAPAN COSMO ENERGYHLDG/