June 16, 2020
In May 2017, our sub-subsidiary, Bradken, Inc. (Bradken), discovered a discrepancy in its test records for a product ultimately sold to the United States. The records initially recorded by the technician who performed the test did not match the data reported to the customer. Bradken immediately reported the issue to its customer upon its discovery, which was traced to alterations performed by a single employee at one of the company’s several foundries. The issue was fully investigated by Bradken as well as the United States Department of Justice (DOJ), leading to the identification of additional discrepancies, all linked to the same individual, whose employment was immediately terminated for the conduct.
While no other Bradken employee engaged in this conduct, and management had no prior knowledge or involvement, Bradken remains liable for the actions of its employee under U.S. law. Bradken thus cooperated with DOJ and relevant authorities throughout the investigation and has taken substantial measures to prevent recurrence. As a result, Bradken was able to enter into a deferred prosecution agreement with DOJ, which will not require a guilty plea and will result in a dismissal of all claims after three years, as well as a separate settlement agreement resolving all civil claims related to the affected products. Bradken also entered into an agreement with the U.S. Government that will allow it to continue supplying high-quality castings to the Government.
The former employee’s actions predate Hitachi Construction Machinery’s acquisition of Bradken, Inc.’s owner, Bradken Ltd. We regret that this incident occurred and we remain committed to strengthening the quality control system at Bradken as part of the Hitachi Construction Machinery group to prevent such incidents from occurring again.
Please refer to this DOJ publication for further details on this matter: