TOKYO — The Defense Ministry of Japan and two other government entities have suspended Mitsubishi Electric Corp. as a designated contractor because the company has been found to have inflated invoices, the ministry has announced.

The ministry, the Japan Aerospace Exploration Agency (JAXA) and the Cabinet Satellite Intelligence Center made the announcements and suspended the company Friday for unspecified periods. The ministry added that Mitsubishi contacted it to admit the allegations the same day.

The government entities allege the company inflated the number of workers and days required for projects in contracts and inflated invoices sent to the three entities.

The three said they will investigate the company’s actions further, including how many projects were padded, the amounts of overestimated payments and other details.

According to the ministry, it received tips around autumn last year that Mitsubishi Electric was billing improperly on contracts.

On Jan. 17, officials of the ministry inspected the Tokyo-based company’s Kamakura plant in Kanagawa Prefecture.

The officials confirmed the quoted numbers of workers and project days were higher than actual figures in the production of Type 03 medium range surface-to-air missiles.

In fiscal 2009, the ministry contracted the company to produce the missiles at a cost of about 33.6 billion yen.

The ministry said it is unclear how much the amount was inflated.
The ministry plans to conduct a special investigation into the company starting on Monday to confirm whether similar acts had been made in other contracts.

Mitsubishi Electric provided missiles, radar and other defense equipment to the Self-Defense Forces.

In fiscal 2010, Mitsubishi Electric’s ministry contracts were worth about 119.7 billion yen, making it second-largest defense contractor behind Mitsubishi Heavy Industries Ltd. for that fiscal year.

JAXA and the Cabinet Satellite Intelligence Center have also received similar tips, according to the entities. After they asked Mitsubishi Electric to examine the allegations, the company reported there was evidence of wrongdoing, the organizations said.

Since fiscal 2003, JAXA has had more than 1,000 contracts, worth about 320 billion yen, with the company. The contracts included the manufacture of the Kounotori-series unmanned space cargo transfer vehicles for the International Space Station.

Since fiscal 2002, the Cabinet Satellite Intelligence Center has contracted the company for research and development of information-gathering satellites, mainly used to monitor military facilities in North Korea.

Both JAXA and the center said details about the bills were unknown.

A Mitsubishi Electric spokesman said, “It’s a fact that the costs of other projects were added to the contracts in question to pad the bills, but we can’t comment further as we are still investigating the case.”