EXCLUSIVE: MUST CREDIT EDISONREPORT.
We have done a deeper dive and here is what we learned regarding Citizen’s fraud.
The Issues.
- Citizen Watch is the corporate parent of Citizen Electronics. Citizen Watch began hearing complaints about its subsidiary, specifically about questions of origin for their LEDs. Citizen Watch hired an independent third party to investigate.
- The third party did find Country-of-Origin issues, but not on LEDs, only on LED components. Some of the components were made in China, but marked made in Japan.
- In addition, this third party uncovered falsifications regarding LM-80 life tests for their Chip-On-Board products. Citizen is the largest COB supplier in the world with many big-name customers in the U.S.
- Citizen caught themselves cheating and they quickly reported their findings. EdisonReport would not know of this story if it were not for their self-reporting, so we applaud Citizen for its transparency.
- The President of Citizen Electronics fell on his sword and immediately resigned when the scandal broke—as we would expect from a premier Japanese company.
The Deep Dive.
- EdisonReport has learned that it is not as bad as feared. Our initial assumption was that Citizencheated on their LM-80 reports to meet DLC requirements for the QLP and this would have far-reaching implications. However, it appears that the true numbers still far exceed the minimum requirements for standard and premium DLC Listings.
Example.
- On the fraudulent report, Citizen reported 98.25% maintained lumens at 8000 hours when the true number was 97.25%. The differences between the fradulent number and the actual numbers are imperceptible. Using the TM-21 Calculator the 97.25% number would extrapolate to 93.54% at 36,000 hours and 91.96% at 50,000 hours—well above the DLC requirement of 70.00%.
Conclusion.
Our initial concern was that Citizen may have faked the LM-80 numbers to gain DLC qualification, but based on the above example, which we are told is worst-case, it appears that a decision was made to cheat to competitive numbers, it was not done to falsely qualify for rebates.
Developing…