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Transport giant Yamato Holdings admits to excessive charging of corporate clients

Yamato Holdings President Masaki Yamauchi, left, and others bow in apology at a press conference announcing excessive charging of corporate customers at the Ministry of Land, Infrastructure, Transport and Tourism in central Tokyo on July 24, 2018. (Mainichi)

TOKYO -- Yamato Holdings Co., Japan's largest provider of home delivery and transport services, announced on July 24 that its subsidiary Yamato Home Convenience Co. (YHC) excessively charged 2,640 of its corporate clients for around 48,000 moving orders, totaling some 1.7 billion yen (approx. U.S. $15.3 million).

The amount makes up about 40 percent of all orders YHC received in about two years from May 2016, according to the company.

Yamato Holdings President Masaki Yamauchi told a press conference in Tokyo on July 24 that the company did not instruct YHC to excessively charge its customers, denying that the practice was carried out as an organization. But some employees testified in an internal investigation that they padded invoices because they wanted to improve their business performance, suggesting that their actions were intentional.

Yamato Holdings set up an investigative committee comprising lawyers and other outside experts on July 23 to look into cases including those prior to May 2016 to get to the bottom of the excessive charging. The company intends to announce the results of the investigation, and measures to avoid a recurrence, in August.

According to Yamato Holdings, the excessive charging originally surfaced in 2011 after a whistle-blower reported the practice. The company conducted an internal probe and rectified the issue. According to Yamauchi, however, Yamato did not carry out a company-wide investigation at that time "because we did not realize that it was a nationwide problem."

Following inquiries from news organizations, the company checked available data of some 124,000 orders it received from 3,367 companies between May 2016 and June 2018. The probe found many instances of excessive charging across the country. In some cases, prices in quotes were invoiced even though the actual number of transported items on the day of the move was smaller. In one example, a client was charged 190,000 yen more than was appropriate.

The company said it has already reported the problem and apologized to its customers, and intends to pay back the differences between the amounts charged and the proper prices. YHC will suspend receiving corporate moving orders until countermeasures against excessive charging are implemented.

Meanwhile, YHC will continue to receive orders for personal moving services. Yamato Holdings says the possibility of excessive charging is low because adjustments are made between quotes and actual prices upon the completion of moving orders.

Yamato Holdings President Yamauchi told the press conference, "The basic rule of charging based not on quotes, but on what actually was transported, was not followed." The company has not confirmed any involvement of or instructions from management in excessive charging.

However, some employees told an internal probe that they committed the practice because they wanted to appear that they were performing well. The investigative committee of outside experts, chaired by lawyer Kenji Kawai, a former judge, will go back beyond the two-year period checked by Yamato to obtain a more detailed picture of what happened and why.

Yamauchi apologized at the press conference, saying, "I deeply apologize for betraying trust and causing great trouble and concern."

(Japanese original by Daisuke Oka, Business News Department)

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