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Hitachi Kokusai Electric Inc.

February 2, 2017
Hitachi Kokusai Electric Inc.

Notice of cease and desist order from the Japan Fair Trade Commission
regarding supply of the equipment for fire rescue digital radio

On November 18, 2014, we were given an on-site inspection by the Japan Fair Trade Commission with regards to our supply of the equipment for fire rescue digital radio * . Today (February 2), we were issued a cease and desist order from the Commission, which has found us in violation of the Antimonopoly Act. Details are as follows:

Firstly, we deeply apologize for the trouble and concern caused to all of our associates, including our customers, business partners, and shareholders. We understand that strict compliance with the Antimonopoly Act is fundamental to engaging in fair and transparent business activities, and are aware of the gravity of this situation. We hereby pledge, more than ever before, to strengthen all initiatives put in place to comply with the aforementioned order, to prevent its recurrence, and to do our utmost to regain the trust of our associates in the future.

We had applied for a leniency policy prior to this on-site inspection, and our application had been approved, and therefore the full amount of the relevant surcharge has been waived.

  1. Overview of the cease and desist order
    We have been ordered to confirm that we have ceased our actions in violation of Article 3 of the Antimonopoly Act (prohibition of unreasonable restraint of trade) regarding our supply of the equipment for fire rescue digital radio, and to take the necessary steps to ensure that these actions are not repeated in the future.
  2. Our response
    After becoming aware of this issue, we promptly applied for the leniency policy, and implemented the following measures to ensure compliance with the Antimonopoly Act and prevent recurrence:
    A declaration of strict compliance, in a message from the company president
    Raising awareness of compliance issues by revising our internal training program
    Confirming the status of compliance with the cease and desist order by strengthening compliance audits
    Enhancements to management through preparation and revision of company and industry regulations
    By sustaining the aforementioned measures into the future, we will strictly comply with the Antimonopoly Act, and eradicate all violations of this Act.
  3. Impact on business performance
    The estimated cost of the impact on our consolidated and individual business performance has been recorded in the third quarterly settlement of accounts for the fiscal year ended March 2017 (announced on January 26, 2017). If we are able to rationally estimate any fluctuation in the cost of the impact in the future, we will disclose this information immediately.

Note: The information shown here is the latest as of the date of issue. Changes to this information might occur without warning. Also note that this information might differ from the latest information as of the time of reading.

“the equipment for fire rescue digital radio” means a series of equipment which constitutes the system for the wireless radio communication used by firefighters for firefighting and emergency services