Japan Press Weekly

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2013 February 20 - 26 [SDF]

Mitsubishi Electric pockets profits despite ‘penalty’

It has been brought to light that Mitsubishi Electric Corporation, which had been suspended from participating in open bidding for public contracts because it was found to have padded bills for defense equipment, received a significant amount of orders from the defense ministry even during the suspension period.

Japanese Communist Party Upper House member Inoue Satoshi on February 19 released the investigation results from the materials he obtained from the ministry and revealed this fact.

At the end of January 2012, Mitsubishi Electric was punished for its fraudulent actions with the suspension of designated contractor status after its padded billing for a ground-to-air missile was uncovered. Just one month later, however, it was awarded a leasing contract for command control support equipment with the defense ministry.

Another month later, the company accepted the very order involved in the fraudulent billing for an intermediate-range G-A guided missile valued about 18.7 billion yen. By the end of 2012, the corporation was awarded a total of 241 contracts with the ministry, and the order volume amounted to more than 134 billion yen.

The defense ministry on February 13 this year lifted the sanction against the corporation because it paid 49.5 billion yen to the ministry, the total of the overcharge and the penalty for breach of contract.

Although the authorities claim that they placed orders with the manufacturer only out of necessity, such huge contracts clearly show that the punishment was only for show.

The Board of Audit, which investigated the maker’s bill-padding scandal, pointed out in October 2012 that those penalizing measures have failed to work properly.

The ministry in December 2012 announced measures to prevent the recurrence of being overcharged. The published document, however, stated openly, “There is no way to impose effective punishments on suppliers concerned without affecting the abilities of the Self-Defense Forces.”