Takata to pay US$1 billion penalty after pleading guilty over defective air bags
The deal was announced hours after prosecutors in Detroit charged three former senior Takata executives with falsifying test results to conceal the inflator defect
Japan’s Takata Corp on Friday agreed to plead guilty to criminal wrongdoing and to pay US$1 billion to resolve a US Justice Department investigation into ruptures of its air bag inflators linked to at least 16 deaths worldwide.
The deal was announced hours after prosecutors in Detroit charged three former senior Takata executives with falsifying test results to conceal the inflator defect, which triggered the world’s biggest automotive safety recall.
Takata will pay a US$25 million fine, US$125 million in a victim compensation fund, including for future incidents, and US$850 million to compensate automakers for massive recall costs, the Justice Department said. The auto parts supplier will be required to make significant reforms and be on probation and under the oversight of an independent monitor for three years.
The company’s shares rose 16.5 per cent in trading in Japan on news of the anticipated settlement, in which it agreed to plead guilty to a single felony count of wire fraud.
The settlement, which must still be approved by a federal judge in Detroit, could help Takata win financial backing from an investor to potentially restructure and pay for massive liabilities from the world’s biggest automotive safety recall.
