After delivering the keynote address, Kenichi was approached by Takaichi who informed him of the results of an internal investigation. Certain people in upper management had secretly been adding extra charges to the costs of purchasing components. They pooled the money in a slush fund and used it to open another company. Kenichi was furious. He fired the ringleaders and asked anyone who knew about the theft and had failed to inform him to apologize straight away and promise to mend their ways. This scandal prompted the Mabuchi brothers to establish the Mabuchi management principle, "Contributing to international society and continuously increasing our contribution". An employee handbook was circulated, called "Purposes and Meanings of Company Business". The Mabuchi brothers were also among the first Japanese executives to catch on to the international trend of developing production capacity overseas. Because a company in Hong Kong was making inferior quality copies of motors and selling them to British Commonwealth countries at low cost with the benefit of a preferential tariff, the Mabuchi brothers decided to build their own factory in Hong Kong and compete head to head. In February 1964, Mabuchi Industry Co., Ltd. was established in San Po Kong, Kowloon, Hong Kong. In March 1965, Mabuchi moved its Japanese factory from a flood-prone area to a safe and large piece of land secured in Matsudo, Chiba (the current location of the corporate headquarters) just outside Tokyo. An American sales office was also opened in New York City. In April 1966, a compact, high-performance motor (RE type) went on the market, and in March of the following year, a submarine motor as a power source for toys and hobbies was also brought to market. Now the company was steadily growing, and by 1968, annual production had reached a volume of 100 million. In July that year, a new high-performance, low-cost motor (FA type) was introduced. The European representative office was opened in Frankfurt, Germany, in October, 1968. In January 1969, with 100% financing from the parent company, Tohoku Mabuchi Co., Ltd. was established, increasing the capacity for processing components, and thus coping with a labor shortage (this subsidiary was moved to the city of Matsudo, and its name was changed first to Mabuchi Electric Industries Ltd. in July 1977, then to Mabuchi Finance in June 1989, before being liquidated in January 1998). Production expanded to Taiwan when new facilities were established there in December 1969 as Mabuchi Taiwan Co., Ltd. to form a motor supply network for the world market.