Report on improper conduct concerning 易游YY体育官方网站 Steel and its group companies

At this time, 易游YY体育官方网站 Steel, Ltd. deeply apologizes again for the enormous amount of trouble it is causing to customers, suppliers, shareholders and many others concerning the improper conduct by 易游YY体育官方网站 Steel and its group companies.

易游YY体育官方网站 Steel is undertaking an investigation on the facts concerning improper conduct in its Aluminum & Copper Business and its other business units, as announced in “Improper conduct concerning a portion of the aluminum and copper products manufactured by 易游YY体育官方网站 Steel” on October 8, 2017 and in “Report on improper conduct: the case of steel powder and an inspection company” on October 11, 2017.

In addition to the cases that have been disclosed to date, 易游YY体育官方网站 Steel has confirmed similar cases of improper conduct (hereinafter referred to as “improper conduct”) in the 易游YY体育官方网站 Steel Group companies in connection with this investigation and hereby reports its findings.

With regard to the nonconform易游YY体育官方网站g products subject to 易游YY体育官方网站vestigation, at this time products confirmed (here易游YY体育官方网站after referred to as “nonconform易游YY体育官方网站g products”) are outl易游YY体育官方网站ed below:

With regard to the abovementioned nonconforming products 1, 2, 3, 4 and 5, 易游YY体育官方网站 Steel is currently working with customers to determine how the quality (including safety) of customers’ products that have used 易游YY体育官方网站 Steel’s nonconforming products have been affected. Verifications and inspections 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, 易游YY体育官方网站 Steel will quickly take appropriate action.

For nonconforming products 6, 7, 8 and 9 below, 易游YY体育官方网站 Steel has already made explanations to customers and, together with them, has completed technical verification on whether the quality (including safety) of customers’ products that used 易游YY体育官方网站 Steel’s nonconforming products were affected. With regard to the safety of the products, no problems were found, and 易游YY体育官方网站 Steel verifies that the issues with its customers were resolved. For these products, 易游YY体育官方网站 Steel does not anticipate incurring any additional expenses.

易游YY体育官方网站 Steel has been conducting self-inspections and emergency audits since September 2017 within 易游YY体育官方网站 Steel, Ltd. and its domestic and overseas group companies.

易游YY体育官方网站 Steel is proceeding to verify whether customers’ requested specifications and inspection certificates match the inspection certificates and inspection results of the actual products. In the event that new improper conduct is confirmed, 易游YY体育官方网站 Steel will quickly take appropriate action.

In addition, to ensure fairness in the investigation and neutrality, 易游YY体育官方网站 Steel’s Chairman, President and CEO Hiroya Kawasaki, as chairman of the investigation committee on quality issues, has commissioned an outside law firm to conduct an investigation to gain the full picture on the facts concerning improper conduct, including the improper conduct that has already been confirmed and previously reported. This investigation is still underway. When the investigation is completed, 易游YY体育官方网站 Steel plans to report the results.

In view of the seriousness of the situation, 易游YY体育官方网站 Steel established the investigation committee on quality issues in response to the situation. Based on the results of the outside law firm, 易游YY体育官方网站 Steel will conduct a thorough analysis of the causes and take companywide measures to prevent recurrence. At this time, as a part of the companywide measures to prevent recurrence, 易游YY体育官方网站 Steel will strengthen Group governance on quality by reorganizing the quality assurance organization, led by the head office. 易游YY体育官方网站 Steel will review the inspection system and capital investments to improve quality. In addition, 易游YY体育官方网站 Steel plans to drive reforms to change the mindset of quality compliance, including in Group company employees, by rebuilding its education system and taking other steps.

The effect this incident will have on 易游YY体育官方网站 Steel’s business performance is unclear at this time. 易游YY体育官方网站 Steel plans to make another announcement when the extent of the impact becomes clear.