Risk & Compliance

Mitsubishi Says Top Exec Knew of Data-Rigging

The Japanese firm reports that the former head of its cable-making subsidiary was made aware in February of guidelines for falsifying quality data.
Matthew HellerDecember 28, 2017

Mitsubishi Materials has reported that the former head of its cable-making subsidiary allowed possibly inferior products to be shipped to customers for about eight months.

An interim investigative report released Thursday said former Mitsubishi Cable Industries President Hiroaki Murata, who resigned on Dec. 1, was informed around February this year of the existence of product-by-product guidelines for falsifying quality data.

However, the report said, Murata allowed shipments to continue, fearing that if he reported the data falsification, it could lead to compensation demands and bankruptcy.

Mitsubishi Materials announced last month that MCI and two other subsidiaries had fabricated data about products used in crucial parts of aircraft and cars, joining the list of Japanese materials makers to have recently disclosed quality control data-rigging. Shipments had continued through Oct. 23.

According to the interim report, irregularities at Mitsubishi Cable go back as far as the 1990s while similar problems at Mitsubishi Shindoh, which rigged data for copper products, started in 2001 at the latest. Mitsubishi Shindoh prioritized strengthening its new car parts business instead of following safety rules, the report said.

“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.

The revelations at Mitsubishi Materials followed Kobe Steel’s disclosure in October that it had falsified data about the quality of aluminum and copper products used in cars, aircraft, space rockets and defense equipment.

A copper tube joint venture between Mitsubishi and Kobe operates a plant in Japan that is at the center of the Kobe data falsification scandal.

The final report on the compliance problems at Mitsubishi is expected around the end of February. “Japanese materials makers are still assessing the full impact of their scandals,” Nikkei Asian Review said. “Once this task is finished, they could begin overhauling governance to bring closer scrutiny to distant subsidiaries.”