USA charges former Takata executives over airbag scandal

Takata's inflators have been blamed for causing its air bags to explode, causing at least 11 deaths in the of October.

Longtime executives Shinichi Tanaka, Hideo Nakajima, and Tsuneo Chikaraishi have been indicted for convincing automakers to buy "dangerous" inflators through false statements. Prosecutors have charged seven people in that case, including five executives still in Germany, and have secured a guilty plea.

According to an indictment, as early as 2000 the trio of workers falsified and altered reports to hide from customers tests that showed the inflators could rupture or otherwise fail to meet specifications. Each of the men was indicted by a federal grand jury on December 7, and face one count of conspiracy to commit wire fraud and five counts of wire fraud.

The executive officer Mitsushige Akino at Ichiyoshi Asset Management said, "Takata has taken a step forward regarding the airbag issue with the U.S. Justice Department and this is being taken positively by the market". When an airbag is deployed, metal and plastic shrapnel from the inflator canister can be hurtling toward drivers and passengers.

The problem has been linked to more than a dozen deaths worldwide and scores of injuries. The remaining $850 million will be used to reimburse the automakers who have been affected by the Takata recall.

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The three former employees worked in Japan and the U.S. Takata's U.S. operations are headquartered in the Detroit suburb of Auburn Hills, Michigan.

"The three Takata executives routinely discussed in email messages the to need to falsify reports to their customers", McQuade said.

In one instance, the indictment claims that Nakajima allegedly notified Tanaka and others in February 2004 that he was "manipulating" test data for an inflator.

Takata is expected to agree to come up with the US$1 billion in funds within a year, with the stipulation that if within that period the company secures a financial backer to help it restructure, the money should be handed over at that time, the people said. The Japanese automaker and Takata have settled almost all lawsuits filed in connection with fatal crashes. As a result, automakers paid Takata more than $1 billion for tens of millions of faulty air bags, the indictment says. It's also the latest example of the Obama administration cracking down on companies and pursuing charges against individual executives in its waning days.