Mitsubishi Materials Corp. said Dec. 16 that an independent investigation confirmed fraudulent transactions involving certain executives of a subsidiary company and other entities in which they have interests.

The Japan-based, base metals-focused company released the financial results for the six-month period ended Sept. 30, the first half of its fiscal 2021, the same day.

On Nov. 3, Mitsubishi Materials postponed the release, which was originally planned for Nov. 6, to enable the fraud investigation while flagging a potential ¥293 million decrease in attributable net income for its fiscal second quarter.

The probe found that 12 companies had overcharged Robertson's Ready Mix Ltd., the California-based unit of Mitsubishi Materials' 70%-owned MCC Development Corp., by $19.7 million in $122 million worth of equipment, inventory and service transactions since 2014. Seven senior Robertson's executives and one former executive have investments in the 12 companies, the company noted.

Mitsubishi Materials said Dec. 16 that it will make changes to Robertson's management system and within the group to prevent further incidents. It added that its own investigation did not identify the same results but noted conflicts of interest regarding the transaction history.

The company reported a net loss of ¥19.15 billion for the six months ended Sept. 30, swinging year over year from a net profit of ¥4.51 billion, as net sales decreased to ¥725.57 billion from ¥748.40 billion. Cost of sales dropped modestly, to ¥647.16 billion in the six-month period from ¥655.59 billion in the prior-year period.

In late November, Mitsubishi Materials estimated an extraordinary loss of ¥21.9 billion for the second quarter of its fiscal 2021 due to the transfer of a subsidiary interest.

As of Dec. 17, US$1 was equivalent to ¥103.13.