Mitsubishi Electric punishes 12 executives over improper quality control

The Yomiuri Shimbun

16:57 JST, December 24, 2021

Mitsubishi Electric Corp. punished 12 of its executives, including former presidents, in connection with a pattern of improper quality control practices on railway and other products, the company announced Thursday.

The company’s investigative team deemed that successive executives incurred heavy responsibility as managers by failing to detect improprieties for many years.

Under the disciplinary actions decided at Thursday’s board meeting, Mitsubishi will ask former President Masaki Sakuyama to voluntarily return three months worth of his compensation, and former President Takeshi Sugiyama to voluntarily return three months worth of his compensation as well as a portion of his retirement benefits. Sakuyama and Sugiyama are currently senior advisors to the company.

Incumbent President Kei Uruma, who was in charge of the business unit involved in the improper practice during the relevant period, will face a 50% cut in his compensation for four months.

Another five current executives will also face cuts in their compensation, and four retired directors will be asked to voluntarily return part of their compensation.

The punishments were decided based on a report compiled by the company’s Governance Review Committee of outside lawyers. The committee concluded that internal inspections conducted three times since fiscal 2016 failed to fully examine and discuss the matter, and pointed out that the president’s responsibility as a manager is extremely heavy.

Even so, the committee said there were no actions that would incur legal responsibility. It will further investigate Mitsubishi’s corporate governance and propose an improvement plan by March next year.

The improper practices, first discovered in plants in Gifu and Nagasaki prefectures, were also found in Mitsubishi’s production bases elsewhere in the country, including plants in Wakayama and Kagawa prefectures. Since an October investigative report, 29 cases have been discovered at its five plants.

A report released Thursday found improprieties at a Kamakura plant in Kanagawa Prefecture, where the company makes equipment related to the electronic toll collection (ETC) system. It was found to have conducted spot checks although it should have checked all products.

Uruma apologized at a press conference saying, “Improper quality control practices in our company are causing a lot of trouble for many people.”