Police raid Mitsubishi headquarters

Investors worry that the scandal will put buyers off

The crisis at Japan's Mitsubishi has gathered pace after police investigating a huge cover-up of customer complaints raided its headquarters.

The company is alleged to have hidden 64,000 customer complaints about its vehicles dating back more than two decades.

Mitsubishi's president is under pressure

The cache of complaints was found hidden in a company locker room by government inspectors.

Since then Mitsubishi has been forced to recall close to one million vehicles to check for failing brakes, fuel leaks and malfunctioning clutches.

The news of the raid provided a fresh hit for the company's hard pressed shares, which fell another 12.4% on Monday.

Charges close

The police search took in its headquarters, two factories and the homes of two officials.

It is reported they confiscated records of meetings of Mitsubishi officials discussing recalls, consumer complaints, and computer disks containing records of recalls and consumers' claims.

There was an impression that recalls meant we were making shoddy cars

Mitsubishi's president Katsuhiko Kawasoe

The raids followed the warning on Friday from transport minister Hajime Morita that the government and police were in the final stages of pressing charges against the carmaker.

Car makers are required to report consumer complaints to the Transport Ministry and must issue recalls if serious defects are found.

None of the defects have been known to cause any deaths, though several accidents in Japan have been attributed to them.

Recall extended

Preliminary inquiries revealed that the letters had been hidden by middle managers who, eager to avoid ordering a humiliating recall, ensured car faults were fixed directly rather than reported to Mitsubishi and MOT monitoring units.

After examining the letters, Mitsubishi initially limited its recall to 692,000 cars and trucks sold in Japan.

But the company has since found that design and production faults may be more widespread than had been thought, and has recalled 200,000 cars in Europe, including 2,000 in the UK, plus 10,000 in the US.

Mitsubishi's president Katsuhiko Kawasoe said in Japan that the internal probe had revealed a "truly regrettable state of affairs" .

"The problem was the lack of conscience among our employees," he said. "There was an impression that recalls meant we were making shoddy cars."