FX.co ★ Six biggest corporate scandals in Japan

Olympus management scandal

Olympus worked as a typical manufacturer of high-tech optics until October 2011, when Michael C. Woodford became its executive director.

He did something that no Western leader could do. Woodford became the head of the Japanese company, not being a Japanese. At the time of his appointment, Woodford had already worked in the company for 30 years. But two months after that, he was fired.

Woodford had raised questions about the firm's dubious transactions.

The board of directors of Olympus had long denied this fact. But in the end, management acknowledged that it had hidden losses of $1.7 billion for more than 20 years.

The board of directors quit, and the company was forced to cut thousands of employees.

Toshiba accounting scandal

According to Nikkei, Toshiba made mistakes in managing the warehouse stocks of discrete semiconductors which are used in a wide range of electronics.

In 2012, Toshiba restructured resulting in the closure of three chip manufacturing enterprises. But before that, the company increased production to maintain uninterrupted supply.

However, demand was low, and unrealized products accumulated. In such cases, the cost of inventories should be written off. Toshiba, hoping for a rise in demand, did not do this. Inaction has led to an overstatement of profit data.

Later investigators found direct evidence of inappropriate accounting practices and overstated profits in multiple Toshiba business units, including the visual products unit, the PC unit and the semiconductor unit.

Due to miscalculations in estimating the cost of some infrastructure projects, Toshiba announced a donwardly revised review of data on operating profit for the three-year period from 2011 to 2013.

Takata airbag scandal

The manufacturer of auto parts was in the center of the scandal in 2017 due to defective airbags that caused many deaths and injuries.

Approximately 100 million cars were equipped with defective airbags: BMW, Fiat, Mitsubishi, Toyota, Nissan, Mazda and other brands.

Exploding airbags have been linked to at least 23 deaths worldwide, dozens received injuries of varying severity.

It was announced the recall of defective products. And Takata suffered huge losses.

The company, founded in 1933, was forced to fill out an application for bankruptcy, and its head was dismissed.

Kobe Steel scandal

Kobe Steel, the third largest steel producer in Japan, delivered its products to companies that produce cars, airplanes and trains around the world. In the fall of 2017, Kobe Steel detected over 700 cases of falsification of data on metal products. For several years, staff had changed or made up data on the quality of some of its products before they were shipped.

This was a big blow to the reputation of Japanese industrial companies. Manufacturing giants including Boeing, Toyota and General Motors have been investigating whether they used any of the sub-standard materials

Two directors of the company, who headed the divisions for aluminum and copper, were aware of the fraud but did not take any action. They were fired. Hiroya Kawasaki, Chairman of the Board and Executive Director, also resigned.

Nissan emissions scandal

Nissan says it has uncovered falsified data from car exhaust emissions tests at most of its Japanese factories.

According to the Kyodo agency, there were revealed cases of forgery of documentation for almost 1.2 thousand cars of various models.

A spokesman said that the firm identified 900 cases in which test results were non-compliant in one form or another. Car assembly was carried out at five factories in Japan.

At the same time, Nissan also confirmed that this issue does not affect vehicles made outside of Japan, and the cars for the local market fully comply with the current safety standards.

Arrest of Carlos Ghosn and Greg Kelly

Nissan's new scandal took place in November 2018.

Nissan CEO Carlos Ghosn and board member Greg Kelly have been placed under arrest after they allegedly violated Japanese financial law.

The Renault-Nissan-Mitsubishi Alliance chairman and CEO earned a salary of about 10 billion yen, or $88.7 million, from 2011 to 2015 but reported only half of that. Also Ghosn bought a luxury housing abroad at the expense of the automaker.

The Tokyo Prosecutor’s Office has already conducted searches at the company's office. Ghosn is expected to be dismissed from his post as chairman of the board of directors.

During the opening of trading on the stock exchange in Tokyo, shares of the Nissan Japanese automaker fell 6.25 percent.