Two Denso executives to plead guilty to price fixing, U.S. says
WASHINGTON -- Two executives at Toyota-affiliated supplier Denso Corp. have agreed to plead guilty to conspiring to fix prices and have agreed to cooperate with a major ongoing criminal investigation of the automotive supply chain, the U.S. Justice Department said today.
The executives, Yuji Suzuki and Hiroshi Watanabe, both Japanese nationals, agreed to serve time in U.S. prison and pay a criminal fine, the department said in a news release.
Suzuki, a senior manager in Denso's Toyota sales unit, has agreed to serve 16 months in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department's ongoing investigation, the government said. Watanabe, a group leader in the Toyota sales unit, agreed to serve 15 months in a U.S. prison, to pay a $20,000 criminal fine and to cooperate with the department's ongoing investigation, the statement said.
"The conspirators reached agreements to fix prices and allocate bids, and took measures such as using code names and meeting in secret to cover their tracks," Scott Hammond, deputy assistant Attorney General for the Antitrust Division's criminal enforcement program, said in the statement.
"Cracking down on international price-fixing cartels that target U.S. businesses and consumers has been, and will continue to be, among the top priorities for the Antitrust Division."
Denso is Japan’s largest auto-parts maker and the biggest supplier of components to Toyota, which in turn is the world’s biggest carmaker. Denso declined to make the executives available for comment.
“One of Toyota’s basic principles is to strictly follow the letter and spirit of laws inside and outside Japan and to operate in an open and fair manner,” said Dion Corbett, a Tokyo-based spokesman at Toyota. “We require our suppliers to thoroughly comply with all laws and regulations, including antitrust laws.”
To date, nine companies and 14 executives have pleaded guilty or agreed to plead guilty in the department's multiyear investigation into price fixing and bid rigging in the automotive parts industry.
Denso, Nippon Seiki Ltd., Tokai Rika Co. Ltd., Furukawa Electric Co. Ltd, Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc. and TRW Deutschland Holding GmbH pleaded guilty and were sentenced to pay a total of more than $809 million in criminal fines. Additionally, 12 individuals have been sentenced to pay criminal fines and to serve jail sentences ranging from a year and a day to two years each.
A third Denso executive, Norihiro Imai, also a Japanese national, agreed to plead guilty to one felony count of price fixing in U.S. District Court in Detroit last April and was sentenced to one year and one day in a U.S. prison, the department said in a press release at the time.
Imai was accused of taking part in a scheme with unidentified co-conspirators to rig bids and to fix, stabilize and maintain the prices of heater control panels sold in the United States and elsewhere. The alleged conspiracy began as early as August 2006 and lasted until at least June 2009, the department said in April 2012.
Denso itself agreed to plead guilty in the conspiracy and pay a $78 million fine in January 2012.
"We take this matter very seriously and are fully cooperating with the investigation," a Denso spokeswoman at its U.S. headquarters said in an e-mail today.
"Denso and its group companies are diligently committed to compliance with laws and regulations, and we are making every effort to ensure that all of our employees thoroughly understand compliance and business ethics."
The supplier is 22.5 percent-owned by Toyota Motor Corp.
Philip Nussel of Automotive News, Bloomberg, and Reuters contributed to this report.
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