Antitrust Law Daily Wrap Up, TOP STORY: Japanese auto industry execs indicted in price fixing probe, (Oct 9, 2015)

By Jeffrey May, J.D.

The latest indictment handed down as a result of the Justice Department’s ongoing antitrust investigation into the auto parts industry names three Japanese executives. A federal grand jury in Covington, Kentucky, returned the one-count indictment yesterday against Japanese nationals Keiji Kyomoto, Mikio Katsumaru, and Yuji Kuroda for conspiring to rig bids for and fix the prices of body sealing products sold to auto makers over an eight-year period (U.S. v. Kyomoto, Criminal No. 2:15-cr-00044-ART-CJS).

Two of the three individuals named in the indictment were identified as current executives of an unnamed supplier—“Company A”—based in Hiroshima, Japan. Katsumaru served in multiple managerial positions during the conspiracy period, including Manager of the Sales and Marketing Division, for the unnamed company. Kuroda served as a sales branch manager at that same company for the entirety of the charged period—September 2003 to October 2011.

It has been reported that the uncharged “Company A” in the indictment is Nishikawa Rubber Company, which is based in Hiroshima. Keiji Kyomoto is listed as a member of Nishikawa's board of directors, and Yuji Kuroda is listed as a Nishikawa operating officer on the firm's website.

The third individual, Kyomoto, was described as a former industry executive. According to the government, Kyomoto resided in the United States and served as the president of an unnamed joint venture between “Company A” and another unnamed company with offices in Indiana and Michigan, which manufactured and sold automotive body sealing products.

The three defendants allegedly instructed subordinates at their respective companies to communicate with co-conspirators at other companies in order to allocate sales of, rig bids for, and fix the prices of automotive body sealing products. According to the government, Kyomoto attended meetings in the United States with co-conspirators during which Kyomoto and the co-conspirators reached agreements regarding sales of automotive body sealing products to Honda and Toyota. The indictment also alleges that Katsumaru and Kuroda instructed and encouraged co-workers to destroy evidence of the conspiracy.

Automotive body sealing products consist of body-side opening seals, door-side weather-stripping, glass-run channels, trunk lids, and other smaller seals, according to the indictment. Automotive body sealing products are intended to keep the interior dry from rain and free from wind and exterior noises.

Ongoing investigation. To date, 58 individuals and 37 companies have been charged in the ongoing investigation. The conspiracies involve a number of automotive parts, including other rubber products, such as automotive anti-vibration products which were produced by Yamashita Rubber Company and Toyo Tire & Rubber Company.

Companies: Yamashita Rubber Co.; Toyo Tire & Rubber Co.; Nishikawa Rubber Co.

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