- CRIME ＆ COURTS
Focus Shifts to Whether Bigmotor’s Fraud Was Systemic
15:28 JST, July 26, 2023
A spate of fraudulent insurance billing by a rapidly expanding used-car dealer has exposed the company’s lack of governance, and called into question the responsibility of insurance firms that dispatched staff to the dealer.
An external investigative committee has confirmed that Bigmotor Co. submitted fraudulent auto insurance claims to insurance firms, including for cases in which cars were deliberately damaged to pad insurance claims.
President Hiroyuki Kaneshige, 71, strongly denied any systemic involvement, including his own, at a press conference Tuesday. “I can understand people thinking it was systemic, but that’s absolutely not true,” Kaneshige said. “The fraud was conducted solely by [Bigmotor’s] car repair division.”
An executive in attendance likewise stressed, “All the board members first learned of [the fraud] through the investigative report.”
The fraudulent claims were made by the sheet metal and painting division, which is in charge of automobile repair.
According to the report, about 60% of the employees involved in the fraud said were acting at their superiors’ instructions. About 70% of the responding employees said the fraud was the result of the company giving top priority to increasing sales.
The amount of profit per unit from the repair and replacement of parts is called “@,” the report said, and plant managers and staff were grilled by the headquarters if the average @ in their store failed to meet the quota of ¥140,000.
Kaneshige admitted that the quota was “a major cause” of the wrongdoing, but said, “The general manager [in charge] was the one who set an unreasonable target.”
The irregularities “occurred due to my negligence in my duties, and I should have gone to more job sites to check the situation,” Kaneshige said.
‘Distorted corporate culture’
At Tuesday’s press conference, the president and executives confessed to problems in Bigmotor’s corporate culture that led to the misconduct.
Bigmotor was founded in 1976 by the current president as Kaneshige Auto Center, in his hometown of Iwakuni, Yamaguchi Prefecture. Kaneshige grew the company into a large corporation with 6,000 employees in one generation. Several current and former employees said the company was under the strong influence of Kaneshige and his 35-year-old eldest son, who is the vice president.
“Our governance is not in keeping with the size of the company,” Kaneshige said.
Shinji Izumi, who was to replace Kaneshige as president, said Tuesday: “As a privately held company, we had few opportunities to hear opinions and suggestions, and lacked an objective viewpoint.
“Over the past several years, excessive performance management, unreasonable targets and frequent demotions have gradually created a distorted corporate culture.”
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