JAPAN: JAPANESE POLICE ARREST SEVEN FORMER MITSUBSHI MOTORS EXECUTIVES SUSPECTED OF NEGLIGENCE
- Title: JAPAN: JAPANESE POLICE ARREST SEVEN FORMER MITSUBSHI MOTORS EXECUTIVES SUSPECTED OF NEGLIGENCE
- Date: 6th May 2004
- Summary: (W5) TOKYO, JAPAN (MAY 6, 2004) (REUTERS) WIDE VIEW OF MITSUBISHI MOTORS CHAIRMAN AND CEO YOICHIRO OKAZAKI (RIGHT) AND MITSUBISHI FUSO CHAIRMAN MICHIO HORI SPEAKING AT NEWS CONFERENCE SCU (SOUNDBITE) (Japanese) OKAZAKI SAYING "We would like to apologise for what has happened." WIDE OF OKAZAKI AND HORI STANDING UP AND BOWING, SAYING "We are sorry." SMV PHOTOGRAPHERS SCU (SOUNDBITE) (Japanese) OKAZAKI SAYING "We won't be able to avoid very difficult conditions in the domestic market." PAN VIEW OF NEWS CONFERENCE
- Reuters ID: LVAAV7W58JJ53VGY6C0UJKNZ40BW
- Location: TOKYO AND YOKOHAMA, JAPAN
- Country: Japan
- Duration: 00:00:52
- Topics: Crime / Law Enforcement,Industry
- Story Text: Japanese police arrest seven former Mitsubishi Motors executives suspected of professional negligence, resulting in death and injury.
Japanese police arrested seven former Mitsubishi Motors executives on Thursday (May 6) for mishandling a truck defect that killed a woman in what could shape up to be a repeat of a scandal at the auto maker just four years ago.
Mitsubishi Fuso Truck & Bus Corp, an unlisted truck maker owned 65 percent by DaimlerChrysler AG DCXGn.DE> and 20 percent by Mitsubishi Motors Crop 7211.T>, admitted in March that a design defect in the wheel hub had been responsible for an accident that claimed a woman's life, reversing earlier claims that improper maintenance was to blame. It issued a recall of 112,000 trucks in Japan.
The officials, among them former Fuso Chairman Takashi Usami, are suspected of professional negligence and falsifying reports about the hub problems, which have caused more than 50 accidents since 1992.
The incident is expected to further damage Mitsubishi's brand image, already tainted by a similar scandal in 2000 when an insider's tip revealed it had been hiding customer complaints for over two decades, repairing vehicles with safety-related defects secretly without issuing a recall notice as required by law.
Mitsubishi Fuso was a wholly owned subsidiary of Mitsubishi Motors until being spun off in January 2003.
Mitsubishi Motors eventually recalled more than two million vehicles and was fined four million yen ($36,790), the maximum penalty available at the time.
Mitsubishi Fuso and Mitsubishi Motors conceded the damage to sales could be grave, vowing to improve internal communication to prevent problems in the future.
"We have breached the trust of our dealers and customers," Mitsubishi Fuso Chairman Michio Hori told a news conference.
"Some kind of impact on sales will be inevitable," he added.
Mitsubishi Motors Chairman and CEO Yoichiro Okazaki conceded the damage to sales could be grave.
"We won't be able to avoid very difficult conditions in the domestic market," Okazaki said.
The case comes at a bad time for Mitsubishi Motors as it struggles to revive itself after its biggest shareholder, DaimlerChrysler, cut off further financial support last month, abandoning plans for a multibillion dollar bail-out.
Japan's fourth-largest auto maker, dogged by more than $10 billion of interest-bearing debt, is expecting a net loss of 72 billion yen ($662 million) for the year that ended in March after its easy credit policy in the United States backfired.
Japan's Transport Ministry separately filed a criminal complaint with the police against Mitsubishi Motors and five former and current executives for falsifying the incident reports.
"They falsified the reports to escape recalling the vehicles, and that is an extremely evil act," Land and Transport Minister Nobuteru Ishihara said.
Kyodo news agency said police also planned to file criminal charges against Mitsubishi Motors on suspicion of failing to carry out adequate safety measures to prevent the fatal accident.
Mitsubishi Motors shares ended down 5.13 percent at 259 yen, while the main Nikkei average .N225> fell 1.62 percent.
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