March 24, 2006 – NEC Corp. has launched an internal investigation after discovering an employee at its engineering unit may have falsified business deals and inflated sales over the past five years by as much as 36.3 billion yen (US $310 million), and padded operating profits by as much as 9.3 billion yen (nearly $80 million).

The problem is seen to involve a single employee, and NEC says it has set aside funds to partly cover any negative impact, and doesn’t expect a significant impact on earnings. For the current fiscal year ending this month, NEC estimates inflated sales at NEC Engineering Ltd. of 13.3 billion (about $114 million) yen, which added 3.4 billion yen ($29 million) in operating income.

The company said it will take necessary actions including filing criminal charges against the unnamed employee, including falsifying documents, and embezzlement of “a significant amount of money” related to the false transactions.