NEC Corp chairman Tadahiro Sekimoto resigned last week over a scandal in which two NEC subsidiaries overbilled the Japanese Defense Agency and in turn offered jobs and favors to agency officials. Sekimoto said in a statement that he was not taking responsibility for the scandal but that he had decided to step down as chairman of his ‘beloved NEC and NEC Group’ for moral reasons and because it was considered the right thing to do in Japanese society. The 71-year-old Sekimoto joined the company as a researcher in 1948 and has been chairman since 1994, before which he was president for 14 years. His departure is seen by many as a major milestone in NEC’s history and a chance for the company to rethink its business strategy. Sekimoto will now become an advisor to the company and a member of its board. NEC also announced its mid-term financial statement last week. The company has seen an 11% fall in net sales compared against the same period last year and losses of $144m, its first losses in first half performance figures since 1994. Sales revenue was $15.4 bn, down from $17.3 bn for the first half of the 1998 fiscal year. The company said that it expects to return a whole year net loss of 35 billion yen ($296m). The company blamed its poor performance on the ‘extremely difficult business environment’ caused by the continuing currency and economic crises in the Asian region. It said that lackluster demand in its domestic market for network equipment and for personal computers, the decline in memory chip prices and low demand for logic ICs had all contributed to the negative growth.
