Keiichi Izumiya, a 52-year-old former department head of Kobe Steel's subsidiary, Kinosho Tekkohansai, has been arrested by the Osaka Prefectural Police on suspicion of special embezzlement. The charges stem from his alleged creation of false invoices that led to the company suffering a significant financial loss. Specifically, it is reported that between 2020 and 2025, Izumiya generated fictitious transactions with a construction company, which allowed him to siphon off funds totaling approximately 115 million yen into a bank account under the name of the said company.

According to the police investigation, Izumiya held the authority to manage purchases and payments related to civil engineering materials and used this position to perpetrate the fraud. He reportedly admitted to the charges and indicated that he utilized the vast majority of the embezzled funds for online gambling, including casino operations and horse racing. The case has raised significant alarms regarding internal controls and fraud management within the company.

The misconduct was uncovered during an internal audit conducted by the parent company, Shinko Shoji, in May 2025. Following this revelation, Izumiya was dismissed from his position in June and has since faced criminal charges. Shinko Shoji has expressed serious concern over the incident and committed to strengthening governance measures across its group of companies to prevent such occurrences in the future.