Mitsubishi Electric Corp. said Thursday that it will take punitive measures against 12 current and former executives, including CEO Kei Uruma, over a series of improper product inspection practices.
The Japanese company determined that past and current management was heavily responsible for failing to recognize the systemic malpractices.
At a news conference, Uruma apologized for the malpractices and pledged efforts to regain trust by establishing a sufficient quality assurance scheme.
Uruma will face a 50% pay cut for four months. Former Chairman Masaki Sakuyama will be asked to voluntarily return 50% of six months’ worth of pay. Former CEO Takeshi Sugiyama will be asked to voluntarily return 50% of six months’ worth of pay and part of his retirement benefits.
The company will also reduce pay for five board members and executive officers. Four former executives will be asked to voluntarily return part of their pay.
The punishments were based on a report from a panel of outside lawyers tasked with reviewing the company’s governance. The report said that the inspection malpractices eroded confidence in Japanese manufacturing and cannot be overlooked.
“While there is no legal responsibility, we determined that management responsibility needs to be pursued,” Toshiaki Yamaguchi, chair of the committee, said at a news conference.
Yamaguchi said that the committee will reassess the extents of responsibility for executives if new information regarding their involvement in malpractices is discovered.
The inspection malpractices were found earlier this year at a plant in Togitsu, Nagasaki Prefecture, that makes air conditioners for train cars, an industrial air conditioner factory in the city of Wakayama and a switchboard plant in Marugame, Kagawa Prefecture.
Following these revelations, Sugiyama and Sakuyama stepped down as CEO and chairman, respectively.
Mitsubishi Electric Thursday reported 18 new cases of inspection misconduct, including one involving an automated toll collection system at a plant in Kamakura, Kanagawa Prefecture.
The Kamakura plant provided customers with false reports of waterproofing tests on all equipment that it had not conducted, according to the company.
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