Report of the Special Investigation Committee and Measures to Prevent Recurrence

Further to our notice of December 20, 2019, Hosaka Corporation has received the report of the Special Investigation Committee, made up of outside experts, on inappropriate conduct in the final inspection of certain power modules made at Ina Works.

The committee found that between April 2014 and November 2019 the insulation withstand test in the final inspection of 11 models of medical-grade power modules was carried out on samples rather than on every unit, as the inspection specification required, and that inspection records were completed as if every unit had been tested. The committee found no evidence that the modules shipped failed to meet their specifications, and re-testing of retained and returned units found no failures. It found that the practice began as a response to production pressure and continued because no one in the inspection section felt able to raise it.

We have accepted the committee's recommendations in full. Inspection results are now recorded automatically by the test equipment, the inspection section reports to the Quality Assurance Division rather than to the Works, and an anonymous reporting line to the outside directors has been established. The President and CEO and two executive officers have returned part of their compensation.

We apologize deeply to our customers and to everyone who relies on equipment that contains our products.