Japan’s welfare ministry said Wednesday that it has decided to apply a collective responsibility system to Megumi Co. under a related law over irregularities including overcharging, banning renewals of service provider designations for all of its group homes for disabled people.

The ministry notified the company and local governments concerned of the decision. The punitive action was based on the comprehensive law on support for disabled people and the decision was made to apply the joint liability system in the belief that there was organized involvement in irregularities committed by the group home operator, such as service fee overcharging.