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Mitsubishi to sue directors over cover-ups

Scandal-hit Japanese carmaker Mitsubishi Motors said yesterday that it will seek compensation totaling US$12.2 million from seven former board members for their roles in defect cover-ups.

The cover-up scandal at the fourth-largest carmaker in Japan and its truck-making affiliate unveiled last year has sent Mitsubishi's sales plunging.

"To draw a clear line between right and wrong in terms of past recall problems ... the company will sue for damages against seven former directors and executive officers, including former chairmen and presidents," the company said in a statement.

The company will limit its claim for damages to net severance payments totaling about ?1.3 billion (US$12.2 million dollars) for the seven people involved.

By targeting three former presidents -- Hirokazu Nakamura, Takemune Kimura and Katsuhiko Kawasoe -- as well as others in the compensation claim, Mitsubishi Motors is seeking to assign responsibility for the scandals to the former management and regain the confidence of consumers.

Criminal charges of professional negligence resulting in death have been filed against Kawasoe, who was indicted for a fatal accident involving a Mitsubishi vehicle with a faulty part.

Separately, Mitsubishi said it would demand that 10 senior officials return a portion of their severance packages.

In June last year, Mitsubishi Motors said that it had engaged in illicit repairs of faulty parts without notifying the government prior to a 2000 cover-up involving its passenger vehicles.

An investigation by outside attorneys was launched after the disclosure to identify the cause of the cover-ups.

It found that managers at the time of the two recalls bore heavy responsibility for failing to fulfill their roles as board members to the grave detriment of the firm, reports said.
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