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Hitachi Chemical hit by new falsification scandal, shares slump

[TOKYO] Hitachi Chemical Co has told customers it falsified inspections for a material used in semiconductors, an industry source familiar with the matter said, the latest in a run of compliance scandals at Japanese firms and the company's second this year. Shares in Hitachi Chemical fell about 10 per cent by mid-morning on Monday, losing more than 30 billion yen (S$370 million) in market value.

The source, who is not authorised to speak to media on the matter and declined to be identified, said the Hitachi Ltd unit recently notified customers of improper tests.

Local media reported over the weekend that the material, which is used to protect semiconductors from scratches and debris, is used in a wide range of products such as computers and other electronic devices.

The company said in a statement on Saturday that a committee of external experts was investigating the issue and would announce the results as soon as they were available.

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The revelations follow Hitachi Chemical's admission in June that it found data falsification in quality tests of lead-acid batteries for industrial use over a period of more than seven years, affecting some 60,000 products shipped to roughly 500 companies.

Other recent compliance failings at Japanese manufacturers include scandals at Kobe Steel Ltd, Nissan Motor Co Ltd and Subaru Corp.

The Tokyo Stock Exchange on Monday issued a warning to investors, citing a lack of clarity around the Hitachi Chemical issue.

REUTERS