Japanese Auto Firms Yazaki and Denso plead guilty – ready to pay $548 million
Yazaki and Denso were held guilty for bid fixing by the US Department of Justice earlier last week. Four of their top executives will even be facing criminal proceedings and be jailed. This is due to the fact that both these auto manufacturers have been responsible for setting prices for auto ancillaries such as wire harnesses and ECUs. The companies have been indulging in these practices since 2000.
While Yazaki will have to shell out a $470 million fine, Denso will have to pay $78 million over and above $200 million being paid by another Japanese supplier by the name of Furukawa Electric Company while three of their executives were also sentenced to imprisonment.
Yazaki has been found guilty on three counts such as price fixing of wire harnesses, instrument panel clusters and fuel senders while Denso, in which Toyota has 23% stake, has been found guilty on two counts of price fixing related to ECUs and hearing control units. Four employees of Yazaki will be facing 15 months to 24 months in jail.
Shiori Hashimoto, Spokeswoman, Toyota Motors, said, “Toyota has consistently asked its suppliers to respect the law. If the parts makers that received orders from the authorities did in fact commit violations of antitrust laws, we would understand this to be a serious issue.”
Plea agreement with the US Department of Justice concerning automotive wire harness cartel
January 31, 2012
On January 30, 2012 (US Eastern time), Yazaki Corporation concluded a plea agreement with the United States Department of Justice to the effect that the company acknowledges the allegations, pleads guilty and pays a fine of US$ 470 million in the criminal proceedings relating to cartel activities with certain competitors for automotive wire harnesses and related products.
Yazaki Corporation has been faithfully cooperating with the DOJ investigation since its inception on February 23, 2010. The plea agreement is intended to resolve all issues between the company and the DOJ arising out of this investigation, upon analyzing the applicable laws, facts and circumstances as a whole.
The company will account for the amount equivalent to the fine as an extraordinary loss in the settlement of accounts for the fiscal year ending June 2012. The persons involved shall be subject to strict internal disciplinary measures. In light of the seriousness of this matter and as a reflection of remorse, the directors shall return a part of their remuneration as follows:
Yasuhiko Yazaki, Chairman 50% for 3 months
Shinji Yazaki, President 50% for 3 months
In relation to this issue, investigations were also initiated at approximately the same time by the Japan Fair Trade Commission and the European Commission. That matters have come to this, Yazaki Corporation takes with the utmost seriousness. In order to prevent any recurrence, the company has intensified its various efforts including conducting thorough internal investigations, reviewing internal rules, conducting regular educational programs and monitoring activities. Yazaki Corporation is committed to observing all applicable laws, the highest standards of corporate ethics and relevant social norms, and to this end all group companies worldwide shall further strengthen their compliance activities.
Plea Agreement with the United States Department of Justice Concerning Certain Automotive Components
KARIYA (Japan) – DENSO Corporation concluded a plea agreement with the United States Department of Justice (DoJ) on January 30, 2012 (U.S. Eastern Standard Time), agreeing to pay a fine of US$78 million (approximately 6.1 billion yen) based on charges that it violated antitrust laws in connection with sales of certain automotive components (specifically, certain body electronic control units [body ECUs] and heater control panels*) to one of its customers.
Since learning of the DoJ’s investigation in February 2010, when the DoJ conducted an onsite investigation at the offices of DENSO International America, Inc. (DIAM), DENSO Corporation’s North American headquarters, both DENSO Corporation and DIAM (collectively, “DENSO”) have cooperated fully with the investigation. The plea agreement requires that they continue to do so.
The fine will have no material effect on the Company’s financial forecast for the fiscal year ending March 31, 2012. The payment will be recorded as an extraordinary loss in the third quarter of the fiscal year ending March 2012.
It is DENSO’s policy to comply with all applicable antitrust laws. Since learning of the investigation in February 2010, DENSO has taken various measures, including implementing even more stringent compliance rules and even more enhanced compliance training to further ensure that its employees comply with all applicable antitrust laws.
In addition, to emphasize the seriousness of these matters, DENSO Corporation’s chairman, president and certain board members and executive directors will voluntarily return 30 percent to 10 percent of their compensation for a three-month period starting in February 2012.
DENSO is committed to compliance with all applicable antitrust laws around the world.