Report on improper conduct: the case of steel powder and an inspection company

October 11, 2017

Kobe Steel, Ltd.

At this time, Kobe Steel, Ltd. deeply apologizes again for the considerable trouble caused to suppliers, shareholders and many others about the improper conduct concerning a portion of its aluminum and copper products.

As described in the announcement “Improper conduct concerning a portion of the aluminum and copper products manufactured by Kobe Steel” dated October 8, 2017, Kobe Steel is currently undertaking an investigation of the facts pertaining to the improper conduct in the Aluminum & Copper Business. Kobe Steel is also conducting an investigation as to whether or not similar improper conducts exist in its other business units.

In regard to this, the investigation by the outside law firm, which was commissioned by the investigation committee on quality issues, is still not completed. Kobe Steel plans to make a report on the results once the investigation is completed. With respect to a portion of the investigation currently being undertaken, Kobe Steel reports that a similar kind of improper conduct (hereinafter referred to as “improper conduct”) has been confirmed.

The product discovered at this time to be subject to improper conduct (hereinafter referred to as “nonconforming product”) is outlined below:

Nonconforming Product 1

Nonconforming Product 2

With regard to the nonconforming products, Kobe Steel, with the outside law firm, conducted technical verifications with respect to the effect on quality (including safety) of the nonconforming products used in the customers’ products. Verification and investigation to date have not recognized specific problems casting doubts on the safety of any of the nonconforming products. In the event that doubts arise on the safety of the nonconforming products, Kobe Steel will quickly take appropriate action.

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