A surprise inspection at Mitsubishi Electric Corp. found evidence of fraudulent billing practices, Japanese government sources said.
The Yomiuri Shimbun reported Monday the unnannounced visit by Ministry of Defense officials at the company's Kamakura plant in Kanagawa prefecture Jan. 17 included a survey of workers who were asked to verify work they had done.
That information was then compared to the company's billing documents.
By cross-referencing the paperwork, officials discovered the company had billed the ministry for workers who had not done any defense contract work although they had been listed as working on Type 03 medium-range surface-to-air missiles, the newspaper said.
The Ministry of Defense suspendedMitsubishi's right to bid on new defense work, the report said. The company is Japan's second largest defense contractor after Mitsubishi Heavy Industries Ltd.
The Japan Aerospace Exploration Agency has also suspended the company's bidding right.
Until an investigation is complete, the company will only be allowed to bid on contracts it is uniquely capable of completing, the newspaper reported.