Mitsubishi! > News > Japan > Mitsubishi Motors > 2004 > Kabushiki Ombudsman Threatens to Sue Mitsubishi Heavy Industries
May 15, 2004. According to Yomiuri Shimbun, Kabushiki Ombudsman (Kabunushi Ombudsman), an Osaka-based shareholders' rights group will file a lawsuit in Tokyo District Court, asking Mitsubishi Heavy Instrustries to not help out Mitsubishi Motors, as it might suffer irreparable loss by investing such large amounts in MMC.
It seems that the group, headed by Professor Koji Morioka of Kansai University, in its lawsuit seeking injunction under Japan's Commercial Code, will argue that MMC's corporate culture is corrupt, and that it is highly likely that its reconstruction plan will fail, thus jeopardizing MHI shareholders' value.
The group had earlier sued MMC in 2001 when it was caught trying to hide consumer complaints. It resulted in a settlement of 180 million yens. According to Daily Yomiuri, Professor Koji Morioka is questioning the attitude of MMC which shameless hid complaints while in negotiations with his group; and also the behavior of MHI's board whose priority seems to be rescuing another Mitsubishi group company, rather than caring about its stockholders. [mitsubishisucks.com fully agrees with Professor Morioka's position]
May 16, 2004. Daily Yomiuri reported that Australia will lose a plant with 3,200 employees. Yoichiro Okazaki is expected to deliver this message to Australian Industry Minister Ian Macfarlane in a meeting on Monday. Moreover, total cuts are expected to be 9,000 employees that includes the employees to be downsized in Normal, Illionis and the back-office staff at MMC's headquarters. Executive officer Hideyasu Tagaya may be elected president of MMC in June's shareholders' meeting. Tagaya is expected to be in-charge of the restructuring while Okazaki will negotiate with other Mitsubishi group companies. A few other management shuffles are expected.
May 17, 2004. Australian Industry Minister Ian Macfarlane said that Mitsubishi Motors hasn't decided on the fate of its operations in South Australia. He made this announcement after he and South Australia state's treasurer, Kevin Foley, met Yoichiro Okazaki, in Tokyo.
Wall Street Journal reported about the rifts in the executive board of MMC about how to finance the turnaround. Mitsubishi Corp apparently is open to funding from outside sources while Mitsubishi Heavy Industries remains opposed to it. Furthermore, possible criminal charges against MMC and Mitsubishi Fuso would make it difficult for any bank to lend them money.
May 17, 2004. Financial Times reports that Mitsubishi group's bank MTGF has agreed to convert up to Y200 billion (about 1.7 billion US dollars) in loans into equity. Earlier it had refused Daimler Chrysler's request to forgive loan, resulting it Dailmer backing out of a restructuring plan. Ironically, the bank has the reputation for being at the cutting edge of Japanese banking reform by refusing to bail out troubled companies. Analysts are questioning MTFG's decision to take equity position in a very troubled company in an extremely competitive auto industry suffering from overcapacity. They are attributing the bank's decision to favoritism towards its own group companies. Mitsubishi group is expected to dominate MMC's board too, leaving its second largest shareholder Daimler without much say in its future plans.
Previous stories in reverse chronological order (Newer ones first)
Rumors of MMC's Rescue PlanInvestment Amount, Models Slashed
MMC Crisis Management Team Selected
Mitsubishi Group Shocked by Daimler's Decision
Daimler Chrysler Decides to Quit Mitsubishi Motors' Resue Plan