2020 was an eventful year for all of us with the global pandemic, postponement of Tokyo Olympic, presidential election in the U.S., and transition from the previous to the current prime minister.
But for Ogura Clutch, the most serious events were the two incidents and investigations conducted by the special investigative committee in their aftermaths. First I would like to apologize to our customers, our suppliers, our employees and their families for having caused anxiety and uneasiness about the future of the company.
The committee issued a report on December 16th, 2020 and it was promptly uploaded to our website. The reason for the establishment of the committee and their investigation has been described in the report, but these incidents were due to negligence of the headquarters and the management team.
We have to acknowledge that there were management errors and negligence, and as a company, we have to accept the responsibility, but in the case of fictitious inventory accounting reporting in our subsidiaries in China, we would like to emphasize that the report did not find any intentional wrongdoing as a company. The report does however, point out management errors and inadequacy of the rules and procedures in place, and in order to prevent another incidence in the future, a new committee has been assembled with the prime objective of implementing counter-measures in order to regain the trust we had lost.
Looking back on our company's history, we have aggressively pursued a position in the world market as a global company. As the center of manufacturing shifts to Asia, we followed the trend by establishing plants in China in order to meet the needs of our customers. However the speed at which we had to expand in China, appears to have compromised our ability to fully train the Japanese staff who supervises these plants, and we feel that that is the ultimate reason for these regrettable incidents.
Also in the U.S., we had a criminal case of embezzlement by an employee. The direct responsibility is obviously on the person who committed the crime, but in a sense, we believe that the way the management handled the company-employee relationship contributed to it. We keenly realize that the company should have relied on policy, rules and procedures when it comes to management of employees, rather than just on trust. Going forward, we will establish more stringent accounting rules and procedures at our oversea subsidiaries in order to prevent this from happening ever again.
We have faced difficulties in the past such as economic aftermaths of Lehman Brothers bankruptcy in 2008 and Tohoku earthquake and tsunami in 2011. For both times, we reminded ourselves of the origin, foundation and principle of our company as a manufacturing company . We thoroughly understand them and practice them here in Japan, but they had not sufficiently become our culture at oversea subsidiaries, which we feel, having been a facet of these cases. We have tasked ourselves to revise and improve the management system of our oversea subsidiaries.
On the flip side, the report actually evaluates positively the way the company responds to customer relationship issues or quality issues overall. But it also points out that our response speed has a room for improvement. As it is declared in our management policy, we must improve speed, effectiveness and efficiency of our internal communications, which would aid us to determine how our management policy should be improved.
Effective internal communications would enable us to respond to problems more quickly. From this stand point, we would like to reform our company's culture as well.
In order for us to overcome the uncertainties such as the global pandemic, we have to keep reminding ourselves of the founding of our company, and the management of the company requires us to know and strategize our strengths and weaknesses.
Every one of us who works for Ogura needs to increase our contribution to the company because good products that our customers value, come from consolidating all of our contributions.
Even with uncertainties ahead of us in 2021 and beyond, we believe we will expand our business by regaining the trust in Ogura Clutch.