Auto parts supplier executive pleads guilty to price fixing

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Artist's rendition of the Denso Corporation logo.

Denso Corporation executive Norihiro Imai has pleaded guilty to price fixing. (Photo Credit: Public Domain/Beao/Wikipedia)

The Detroit Free Press reports that Norihiro Imai, a top executive with the automotive parts supplier Denso Corporation, has pleaded guilty and will serve a year and a day in prison for acts of pricing fixing. Imai has admitted to conspiring with other market representatives to fix prices and manipulate bids for automotive heating control panels, the U.S. Department of Justice said Monday.

Nearly a three-year conspiracy

According to the charges levied against Imai, he was involved in a price fixing conspiracy that lasted nearly three years, from as early as August 2006 until at least June 2009. An outstanding plea agreement that awaits court approval stipulates that Imai has agreed to pay a fine of $20,000 for criminal activity and to cooperate in the Justice Department’s ongoing investigation into the wider web of price fixing within the automotive electrical components industry.

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Denso dominates the market

Japan’s Denso Corporation is known as the world’s biggest electronic components supplier for the automotive market. The fiscal year that ended March 31, 2011, saw sales of $37.7 billion. Denso makes many different types of electronic components for automotive parts assembly, including air conditioning units, fuel injection systems, engine control components, horns, air bags, windshield wipers and cruise control parts and the heating components that were at the center of the charges against Imai.

Top two agree to pay fines

In January 2012, Denso agreed to pay a $78 million fine to settle claims of price fixing, while rival electrical components firm Yazaki acquiesced to pay a $470 million fine for similar charges, while also pleading guilty in an antitrust suit brought by the U.S. Department of Justice. Four Yazaki executives pleaded guilty and agreed to prison time, ranging in duration from 15 months to two years.

Yazaki, the second-largest parts supplier in the world, received the second-highest recorded fine for price fixing in history, according to the Justice Department. The record is $500 million, paid in 1999 by Switzerland’s Hoffman-La Roche Ltd., when the department said that price fixing involving vitamin prices occurred.

Previous settlement with Furukawa Electric

The ongoing price fixing probe by the Justice Department resulted earlier in a settlement with Tokyo-based Furukawa Electric, which pleaded guilty and agreed to pay $200 million. Furukawa’s settlement prompted a rash of civil suits involving industry price fixing for automotive wire-harness systems. Non-participating suppliers and consumers have claimed financial injury because of the price fixing involved. At least two major automakers – Toyota and Honda – are believed to have been harmed by the conspiracy among suppliers to rig prices.

Another instance of corporate price fixing

Sources

Bloomberg Businessweek

Detroit Free Press

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