KDDI-owned Mobicom faces compensation claims after huge grassland blaze

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(SOURCE: SOPA IMAGES LIMITED/ALAMY STOCK PHOTO)

KDDI's Mongolian subsidiary Mobicom faces compensation claims after setting off an out-of-control blaze on a protected nature reserve. A vehicle convoy carrying Mobicom executives torched around 4,000 square kilometers of grassland near the China border earlier this month, razing around 80% of the Numrug National Park.

Mobicom initially defended its staff, claiming they were conducting a "site survey for the development of communication networks" when a vehicle caught fire and spread to the surrounding plains, Tokyo Reporter said.

But local media painted a different picture, alleging the visitors had no business purpose and were actually engaged on an illegal fishing trip, the paper said.

The fire began on October 8 when dry grass beneath the vehicles ignited and quickly spread. Mongolian authorities said they had sent 60 crews to combat the blaze, while China had deployed 3,400 firefighters and local emergency crews as the fire spread across the border.

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The blaze was contained on October 12 and extinguished last Friday. Mobicom CEO Yasuhiro Ochi issued an apology for the damage.

Recover damages

Numrug National Park is designated as a strictly protected area with larch, birch, and Siberian pine forests and diverse wildlife including the Mongolian gazelle and the Siberian ibex.

Mongolian Minister of Justice and Internal Affairs Temuulen Ganzorig said an investigation is underway, and warned that those responsible would be required to pay compensation for the damage, Japan Times reported.

"Measures will be taken to hold officers of the border administration and employees of Mobicom Corporation accountable and to recover the damages," he was quoted as saying.

It is the second scandal KDDI has been embroiled in over the past year, both of them caused by subsidiaries. The group is still carrying the scars of a long-running fraud by its advertising businesses, which had created a $1.6 billion trail of fake online ads over seven years.

Only late last year, the company discovered that almost the entire business of two subsidiaries had been faked, leading to a loss of $320 million in operating profit. A review later found the company had lacked expertise in the advertising business and its risk management had been negligent.

Tellingly, it also concluded KDDI lacked an overall management system for subsidiaries.

KDDI did not respond to Light Reading's queries.

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