Mitsubishi Materials admits to product fraud at 2 subsidiaries

Mitsubishi Materials Corp on Thursday said it was working with its two subsidiaries and their customers after these companies were found to have falsified data of products shipped to over 200 customers, in Japan and abroad, in the latest quality compliance scandal involving a Japanese manufacturer.

Mitsubishi Materials said the subsidiaries manipulated inspection data of parts used in aircraft, automobiles and industrial machinery. MMC;'s shares dropped as much as 11 per cent the following day, hitting their lowest price since August.

The admission follows a spate of compliance failings at Japanese manufacturers, including Kobe Steel Ltd, Nissan Motor Co Ltd and Subaru Co Ltd, which threatens to shatter the country's reputation as a maker of high-quality products.

Mitsubishi Materials Corp said, it had as far back as in February, discovered that certain products manufactured and sold by Mitsubshi Cable Industries (MCI) and Mitsubishi Shindosh Co Ltd, both of which are consolidated subsidiaries of MMC, deviated from customer standards or internal company specifications due to misconduct, including the rewriting of inspection records data.

"MMC and MSC will need to promptly validate the safety of their products with the cooperation of their customers, and thus, we have decided to publicly announce the status of the handling of the non-conforming products".

The company tendered an apology to the public for any problems and difficulties caused by such actions and assured customers of remedial measures to strengthen its quality control framework.

MCI said it discovered certain misconduct, including the rewriting of inspection record data, resulting in a portion of the products manufactured and sold by the company not being in compliance with customer or internal company specifications. MCI said it became aware of the misconduct in February and undertook verification of the facts and on 23 October gave instructions to suspend the delivery of non-conforming products.

Mitsubishi said MCI's non-confirming products may include those used in aerospace, industrial equipment, electric power equipment, automotive etc.

With respect to MSE, Mitsubishi said, the misconduct included the rewriting of inspection records data with regard to hardness and tensile strength measurement data for brass strips used on automotive terminals and the conductivity and surface roughness measurement data for certain alloy strips used on automotive terminals and the conductivity and surface roughness measurement data for certain alloy strips and native copper strips, so that the figures fell within the range of customer standards.

MSC discovered these issues during an internal review in October this year , suspended shipments of the non-conforming products on 18 October and reported the findings, Mitsubishi said.

Mitsubshi said the companies have identified the customers who have received the products and MSC in the process of meeting the customers individually to solve the issues.