Bridgestone to withdraw from Marine Hose business - finds cases of other bribes - will restructure DP unit

ERJ staff report (DS)

Tokyo -- Bridgestone Corp has said it will no longer take any new orders in the Marine Hose business segment. However, an internal investigation has revealed cases of inappropriate payments in other business activities. In addition, a restructuring will see the elimination of the International Engineered Products Department. While Bridgestone will continue to do business in those areas, the company's business structure will be completely changed.

Referring specifically, to Marine Hose, the company said, "As a general principle, we will not take new orders. However, in order to minimise trouble to our customers, we will continue required services for those who continue to use our products and will do our best to assist such customers to change to other vendors."

The move follows an internal investigation in which the company discovered that, "there have been incidents of improper monetary payments to foreign agents, all or a part of which may have been provided to foreign governmental officers, and other possible forms of improper payments."

Bridgestone added that "as our investigation proceeds, we are also finding similar instances in relation to other industrial products sold by Bridgestone Corporation. The investigation is continuing and could expand." A spokesman for Bridgestone in Tokyo said there has been suspicious activity in Bridgestone's Marine Fender and Rubber Dam businesses. He said Bridgestone has appointed an investigation committee consisting of external attorneys who have been investigating these matters to date. This committee is likely to report its findings in about three months, he added.

The spokesman said Bridgestone is cooperating with the authorities in all areas where it has found evidence of wrong-doing, but at this point, does not know if other companies were involved in making illegal payments outside the marine hose area. Bridgestone will decide  what action to take once the report has been published, he said. 

As a result of the initial investigation, said Bridgestone, "The International Engineered Products Department will be abolished. The Diversified Products Division will be reorganised combining small product sections into one larger organisation, and administration, human resources and as well as the audit system will be re-structured. The internal management audit system will be fortified in both domestic and overseas businesses."

Since May 2007, the US Department of Justice, the European Commission, the Fair Trade Commission of Japan and other authorities have been investigatingBridgestone Corp. and other companies over allegations of involvement in international cartel activities regarding the sales of marine hoses. A series of executives have been charges with anti-competitive offences in the US and the UK.

Bridgestone said, "Improper payments to foreign agents, which will possibly be paid to government officers and other customer representatives is a serious violation of our compliance rules. Such acts betray the confidence that customers, shareholders and business counterparts have in our company. We solemnly apologise for all such acts."

The company added that it has handed over details of its internal investigation to the Japanese authorities, adding that the company will cooperate, should Japanese prosecutors wish to take the matter further.

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Bridgestone press release.pdf