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Mitsubishi Materials unit hid misconduct to avoid compensation: report

Kyodo

A former president of a Mitsubishi Materials Corp. subsidiary knew that its data was being fabricated but continued to ship the products in question, fearing that revealing the misconduct could lead to demands for redress and bankruptcy, an interim investigative report said Thursday.

The report also said a lack of compliance awareness resulted in irregularities at another group firm. The final report is expected around the end of February.

“I apologize from the bottom of my heart to our customers and stakeholders for the trouble caused,” Mitsubishi Materials President Akira Takeuchi told a news conference in Tokyo.

Takeuchi said his company will introduce outside consultants and improve controls at its plants and subsidiaries to prevent a recurrence of the quality-control issues.

According to the interim report, irregularities at Mitsubishi Cable Industries Ltd. dated back to the 1990s. It said former Mitsubishi Cable Industries President Hiroaki Murata, who stepped down from the post on Dec. 1, was informed around February this year of the existence of a “list” of steps for carrying out rigging data.

But Murata allowed shipments to continue, fearing that if it reported the falsification to its customers, it would be flooded with requests, making it difficult to deliver them on time. He was also afraid of receiving compensation demands, it said.

Mitsubishi Materials has said Mitsubishi Cable Industries skipped a required inspection on some of its sealing products used for joining metal parts such as pipes, and also falsified data for magnetic wire used in electrical products.

The report also found that irregularities at Mitsubishi Shindoh Co., which rigged data for copper products, started in 2001 at the latest.

Mitsubishi Shindoh had prioritized strengthening its new car parts business instead of sticking to safety rules, the report said.

To prevent a recurrence, the company needs a “basic mindset” that it will “keep its promises to customers” and take orders based on its capabilities, the report suggested. Mitsubishi Shindoh also needs to give quality-control training to its employees and increase the use of automatic data entry to avoid manual manipulation, it said.

Mitsubishi Shindoh said Thursday that three of its executives are set to resign on Dec. 31 to clarify management responsibility, while Mitsubishi Shindoh’s president and vice president will return part of their remuneration.

Japan has been reeling from a string of industrial scandals, threatening its reputation for quality.

The first quality scandal came to light in September after Nissan Motor Co. was found to have been using uncertified workers to carry out new car inspections at their domestic plants.

The scandal spread to other business sectors, with the nation’s third-largest steel-maker, Kobe Steel Ltd., admitting it had sold products with tampered data to companies at home and abroad.

Subaru Corp. also admitted to inspections by uncertified staff at its plants, while quality problems at some Mitsubishi Materials subsidiaries were disclosed. Toray Industries Inc. also said a subsidiary supplied tire cord fabric and other products with falsified data to customers.