Legal
In March 2005, Sumitomo Heavy Industries underwent an inspection by the Japan Fair Trade Commission (JFTC) for suspected collusion regarding contracts for flood control gates on rivers and dams commissioned by the Ministry of Land, Infrastructure, Transport and Tourism, the Water Resources Agency, and local governments.[7]
In May 2005, the JFTC filed criminal charges with the Public Prosecutor’s Office for violations of the Antimonopoly Act against Sumitomo Heavy Industries and seven other companies for engaging in collusion in the bidding process for bridge construction projects commissioned by the former Japan Highway Public Corporation and the Ministry of Land, Infrastructure, Transport and Tourism (see ja:橋梁談合事件).
On June 12, 2006, the Osaka District Public Prosecutors Office Special Investigation Department indicted Sumitomo Heavy Industries and ten other companies for colluding in the construction of sewage and sludge treatment facilities commissioned by local governments, violating the Antimonopoly Act. As a result, the company was subjected to a nine-month suspension from government contracts by the Ministry of Land, Infrastructure, Transport and Tourism.[7]
On May 25, 2012, it was revealed through a surprise audit by the Board of Audit that Sumitomo Heavy Industries and its subsidiary Sumitomo Heavy Industries Special Equipment Services had over-reported working hours and inflated billing amounts for maintenance and repairs of autocannon systems since the 1970s, leading to a suspension from government contracts.[8][9]
In February 2013, the company’s suspension ended after it paid a penalty of ¥2.3 billion due to fraudulent billing practices.[10] However, in December 2013, it was discovered that the company had falsified test data for 5,000 units of 5.56mm machine guns (license-produced Minimi light machine guns), 7.62mm vehicle-mounted machine guns (Type 74), and 12.7mm heavy machine guns (license-produced M2 Browning), leading to another five-month suspension from government contracts.[11][12]
On October 24, 2014, Sumitomo Heavy Industries and its employees were referred to prosecutors for violating the Explosives Control Law and the Firearms and Swords Control Law for conducting unauthorized test firings of machine guns manufactured by the company.[13]
On October 1, 2018, Sumitomo Heavy Industries' subsidiary, Sumitomo Heavy Industries High Metax, was found to have falsified inspection data on hardness and components of rolling rolls, affecting steel plate production equipment parts.[14]
On January 7, 2020, a former secretary of the Sumitomo Heavy Industries Labor Union was arrested on suspicion of embezzling ¥50 million from a retirement savings account.[15][16] Ultimately, a total of approximately ¥336.6 million was confirmed to have been embezzled, and on June 19 of the same year, the Tokyo District Court sentenced the former secretary to eight years in prison.[17]
On May 20, 2021, Sumitomo Heavy Industries revealed that design drawings for sample parts used in test machine guns for the Japan Ground Self-Defense Force had been leaked to China. The Ministry of Economy, Trade and Industry issued a severe warning to the company and its subcontractor for violating the Foreign Exchange and Foreign Trade Act.[18]
On May 2, 2024, it was revealed that Sumitomo Heavy Industries and its subsidiary, Sumitomo Nako Forklift, had committed inspection fraud during routine checks of forklifts. Workers had omitted necessary steps, such as removing brake components for internal inspection, leading to the discovery of four instances of inspection fraud across two vehicles. Investigations are ongoing to check for similar violations.[19]
