Japan's Takata Corp, maker of defective air bags that have been linked to 11 US deaths, could settle criminal charges with the US Department of Justice before the Obama administration leaves office next month, a source briefed on the ongoing talks told Reuters.
Part of a settlement would include Takata pleading guilty to criminal misconduct, the source told Reuters. The Justice Department has investigated whether Takata hid information from safety regulators and issued misleading statements about the dangers posed by the air bags.
The Wall Street Journal, citing people familiar with the matter, reported earlier on Wednesday that a settlement could require Takata to pay as much as USD 1 billion and be reached as early as January.
The precise amount Takata pays could be considerably less than USD 1 billion and be paid over several years, the source said.
Both Takata and the DoJ declined to comment.
Takata air bag inflators have been linked to at least 16 deaths worldwide, including the 11 US deaths. The inflators can explode with excessive force and send metal shrapnel inside cars and trucks.
There is no guarantee the talks will wrap up by Jan. 20, when Obama leaves office, said the source.
Monitors similar to the one that could be installed for the Takata case have been appointed as watchdogs in two recent major US auto safety recalls involving General Motors Co and Toyota Motor Corp.
Regulators have said recalls would eventually affect about 42 million US vehicles with Takata air bag inflators, making this the largest safety recall in US history.
Takata and the Justice Department have held talks for months about reaching an agreement.
The National Highway Traffic Safety Administration in December 2015 named a former US Justice Department official to oversee the Takata recalls and the company's compliance with a NHTSA settlement. In November 2015, Takata agreed to pay a USD 70 million fine for safety violations and could face deferred penalties of up to USD 130 million under a NHTSA settlement for further violations.
Earlier this month, the US Department of Transportation said it would press the auto industry to accelerate the pace of replacements for defective Takata air bag inflators and signalled a likely widening of the industry's largest recall.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
