Sales of GE equipment may be hit hard in aftermath of Japanese bribery case

February 27, 1991

The Japanese Ministry of Education has ordered a halt to purchasesof GE medical imaging equipment by national universities, accordingto a Japanese radiologist contacted by SCAN. The ministry's movefollowed the arrest this month of a Chiba University

The Japanese Ministry of Education has ordered a halt to purchasesof GE medical imaging equipment by national universities, accordingto a Japanese radiologist contacted by SCAN. The ministry's movefollowed the arrest this month of a Chiba University radiologyprofessor accused of taking bribes from Yokogawa Medical Systems,GE Medical Systems' majority-controlled Japanese venture.

Two YMS executives, branch managers in Tokyo and Chiba, werealso arrested in the bribery case, according to The Daily Yomiurinewspaper in Japan.

Japan's Ministry of Health and Welfare has called for a "voluntary"freeze on YMS sales to national and municipal government hospitals.Total GE/YMS medical imaging sales in Japan may be cut by about40% as a result, according to the Japanese radiologist, who requestedanonymity.

The formal Ministry of Education order banning YMS sales touniversities will be effective until the YMS personnel are tried,which could be as long as one year. The voluntary freeze may lastthree months or more, he said.

Yutaka Morita, YMS public relations manager, confirmed mediareports of the arrest of YMS employees on bribery charges. "YMShas strict internal policies prohibiting this type of activityand has given its employees extensive training and education relatedto this subject," he said in a written statement.

The bribery charges against Professor Sadao Uematsu involvedabout $17,000 in payments. Some of the payments were compensationfor overseas travel expenses incurred by the radiologist. ChibaUniversity Hospital purchased two GE computed tomography systems,one in 1986 and the other last October.

The university set aside funds in its 1991 budget for the purchaseof a high-field GE Signa magnetic resonance imaging system. Uematsuwas a member of a hospital committee that decided on equipmentpurchases, according to the The Daily Yomiuri report.

"We are now very busy, especially our sales department,visiting our customers in a very Japanese way to explain the situation,"Morita said.