Business / Corporate

Mitsubishi Materials group firm covered up data falsification even after internal probe found misconduct

by Kazuaki Nagata

Staff Writer

Mitsubishi Materials Corp. said Wednesday that its group company covered up data falsification for about a year after the misconduct was uncovered by an internal probe.

Diamet Corp., a maker of automotive sintered parts, neglected final product quality tests and modified specification data when they did not meet figures agreed upon with clients.

According to a final report on the misconduct compiled by an independent third party, it was unclear exactly when and how the falsification started at Diamet — but it possibly dates back to 1977.

Mitsubishi Materials learned of Diamet’s misconduct in 2016 after getting a tip from a whistleblower. The internal probe, conducted between September 2016 and March 2017, determined that Diamet had not run final quality tests and modified quality specification data. Preventive measures were then implemented, but the firm had continued the wrongdoing, the report said.

It also said that the former president of Diamet told the firm’s executives that it would be better to not report to Mitsubishi Materials about when it was running compliance checks because it would have to halt the production line at its factory in the city of Niigata, impacting its customers. The former president also thought that Diamet could solve the problems eventually, saying that reporting to the parent company would not really improve the situation.

“I think the former president had a poor understanding (of the situation) and made the wrong call,” Mitsubishi Materials President Akira Takeuchi said at a news conference, adding that Diamet should have revealed the incident to its parent company.

But Mitsubishi Materials learned in January — based on information from another whistleblower — that the misconduct had actually continued within Diamet.

Mitsubishi Materials first disclosed the data falsification in November, announcing that its three subsidiaries engaged in such misconduct.

The company also said Wednesday that the number of firms affected by the falsification scandal increased to 762 from the previously announced 695 after further investigation.

It said causes of the scandal include employees being focused on increasing orders and meeting delivery deadlines despite a lack of processing and manufacturing capacity. They also had poor awareness of promises made to clients, such as product specifications, the firm said.