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Japanese wire harness supplier fined $200 million, executives to be jailed for cartel activities

Furukawa Electric (Tokyo) ) concluded a plea agreement with the United States Department of Justice on September 29 under which the company acknowledged allegations made in criminal proceeding relating to cartel activities with certain competitors for automotive wire harness and related products and agreed to pay a fine of $200 million. Three U.S.-based executives, all Japanese citizens, will also be jailed in the U.S. as part of the agreement.

Furukawa Electric (Tokyo) ) concluded a plea agreement with the United States Department of Justice on September 29 under which the company acknowledged allegations made in criminal proceeding relating to cartel activities with certain competitors for automotive wire harness and related products and agreed to pay a fine of $200 million. Three U.S.-based executives, all Japanese citizens, will also be jailed in the U.S. as part of the agreement.

The Justice Department says Furukawa conspired with other cartel members to fix pricing wiring harnesses for a period of 10 year starting in January 2000. No details were provided on other companies involved in the price fixing schemes nor those companies who were affected.

According to court documents, Furukawa, executives Junichi Funo, Hirotsugu Nagata and Tetsuya Ukai,  and their co-conspirators carried out the conspiracy by agreeing, during meetings and conversations, to allocate the supply of wire harnesses and related products on a model-by-model basis and to coordinate price adjustments requested by automobile manufacturers in the United States and elsewhere.  They sold automotive wire harnesses and related products to automobile manufacturers at noncompetitive prices and engaged in meetings and conversations for the purpose of monitoring and enforcing adherence to the agreed-upon bid-rigging and price-fixing scheme.

"As a result of this international price-fixing and bid-rigging conspiracy, automobile manufacturers paid noncompetitive and higher prices for parts in cars sold to U.S. consumers," said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice's Antitrust Division.  "This cartel harmed an important industry in our nation's economy, and the Antitrust Division with the Federal Bureau of Investigation will continue to work together to ensure that these kinds of conspiracies are stopped."

"When companies partner to control and price fix bids or contracts, it undermines the foundation of the United States' economic system," said FBI's Special Agent in Charge Andrew G. Arena.  "The FBI is committed to aggressively pursuing any company involved in antitrust crimes."

For its part, Furukawa Group Companies said it fully cooperated with the U.S. Justice Department's investigation and also carried out its own investigation and compiled its own report through a Third-Party Investigative Committee This investigation concluded in 2009, uncovering several instances of price fixing, and the company since implemented measures to ensure that the practice does not reoccur.

The company has also decided that certain Japan-based directors will return part of their compensation, as detailed in an English language press release on its website that, however, fails to mention that three of its U.S.-based executives will also serve jail time ranging from a year and a day to 18 months.-[email protected]

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