The Defense Agency announced Friday that it will suspend business dealings with electronics giant NEC Corp. and affiliate Toyo Communication Equipment Co. from Oct. 1 in the wake of a procurement scandal involving former officials of the agency and the companies.
The chief of the agency's Equipment Bureau, Kozo Oikawa, said Toyo Communication would be ordered to refund 2.1 billion yen to the state coffers to compensate for having overcharged for communications equipment in the past.
NEC provided the agency with defense equipment worth more than 100 billion yen in fiscal 1997, making the company its fourth-largest supplier on a value basis. The agency declined to mention when dealings with the companies would resume, and Toyo Communication said it will comply with the agency's order for repayment. NEC, however, said it has not heard about the agency's plans to suspend business with the two firms.