JAPAN: Rogue trading hits Honda Motor Q3 pre-tax earnings
Honda Motor on Tuesday said "inappropriate trading activities" by the seafood section of the foodstuff division of consolidated subsidiary Honda Trading Corporation (HT) would reduce the automaker's third fiscal quarter pre-tax earnings by about JPY15bn (US$181.1m).
"The company deeply regrets any concern or difficulty that this matter may have caused its shareholders, business partners or other stakeholders," Honda said in a statement.
It said it learned last month of "inappropriate trading activity with several seafood companies by HT’s seafood section" and immediately formed an investigation committee headed by an executive vice president, Koichi Kondo.
It added that an employee "became involved in purchasing inventory significantly over priced compared to market price, and repetitive trading and circular trading of the same inventory among a number of its business partners".
"The company’s investigation committee is continuing its investigation into the cause, responsible persons, measures to prevent future occurrences, and the occurrence of any similar inappropriate trading activity, and will announce results as soon as they become available," the automaker added.
Honda Trading's main operations include trading of auto and motorcycle parts, raw materials and finished vehicles as well as food products.
In the fiscal year ended March 2010, it had JPY588.6bn in sales, according to a Dow Jones report.