Takata has reached an agreement with the U.S. Department of Justice – DOJ – whereby it will plead guilty for falsifying airbag testing data and reports that were provided to automakers. One billion dollars is the sum of the plea bargain – and it looks like a real bargain to us, given the severity of the charges – over deadly airbag shrapnel responsible for at least 15 deaths and hundreds of injuries.
It will pay a criminal fine of $25 million and establish a $125 million restitution fund for individuals who suffered or will suffer personal injury caused by the malfunction of a Takata airbag inflator, and who have not already resolved their claims. Three Takata executives face criminal charges.
In addition, Takata will establish an $850 million fund for automakers who received false testing data and reports, or who have purchased airbag inflators from Takata containing phase-stabilized ammonium nitrate. Takata also agreed to improve its corporate compliance program and appoint an independent monitor, who will report to the DOJ for three years while monitoring Takata’s compliance with its legal and ethical obligations.
Takata previously acknowledged issues related to the integrity of Takata’s inflator validation testing and reporting of test results to its customers. Its actions have effectively ruined the company. Since February 2016, Takata’s Steering Committee and its financial and legal advisors have been trying to get new investment for Takata. Takata needs more money to address Takata’s financial and operational issues and to resolve its inflator issues with its automotive customers.
This settlement ends the criminal DOJ investigation into Takata and all its subsidiaries and affiliates, including Takata’s U.S. subsidiary, TK Holdings (“TKH”).
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