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JAPAN: Police Raid Mitsubishi Motors

Business Recorder
August 28th, 2000

Japanese police investigators raided the offices of Mitsubishi Motors Corp on Sunday on suspicion of concealing customer complaints and recalls from government inspectors for decades, Kyodo news agency reported.

The police search -- a typical move in cases of suspected legal violations -- came after the car maker's admission last week that week it had systematically covered up customer complaints for 20 years.

Transport Minister Hajime Morita said on Friday that the ministry was considering filing a complaint against the company with the Tokyo Metropolitan Police and that a decision would be made next month.

Last month, the ministry -- acting on a tip-off -- found unreported consumer complaints in a company locker room, leading the company to recall more than half a million vehicles.

Announcing the results of an internal probe last Tuesday, Mitsubishi said it would widen the recall to almost 620,000 vehicles. It has also offered to check 200,000 other vehicles.

The firm, in which German-US auto giant DaimlerChrysler has agreed to buy a 34 percent stake, estimates the recall cost to be 7.5 billion yen ($70.13 million).

Kyodo said that police searched Mitsubishi's headquarters and four other offices seeking evidence of whether it had committed illegal acts by failing to report the bulk of the complaints to the government.

Analysts have said they expect the long-term impact of the scandal to be small, as a similar incident at Subaru-brand maker Fuji Heavy Industries in 1998 resulted in a tiny fine and had little effect on sales. They also differentiate it from Bridgestone Corp's recall of 6.5 million tyres. US safety regulators say tyres made by Bridgestone's US subsidiary Firestone may be linked to 62 deaths.

Mitsubishi cars affected by the recall, in contrast, have been tied to one accident in which two people suffered whiplash when a Mitsubishi Montero sports utility with a brake problem hit their car.

On Friday, Mitsubishi Motors denied a report that company president Katsuhiko Kawasoe was likely to resign over the affair.

The daily Yomiuri Shimbun said that Kawasoe was coming under increasing pressure to quit as the Transport Ministry was likely to ask police to press charges against the company.

Kawasoe told reporters last week that he would not quit and considered it his task to rebuild the company.

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