Japanese tax officials have discovered that Suzuki used its racing motorcycle business to hide $3 million (300 million yen) in income over two years. According to The Japan Times, the company now must pay $4.4 million (450 million yen) in back taxes, which includes penalties. The authorities also found nearly $11.7 million (1.2 billion yen) in accounting errors.
The investigation found that Suzuki reported unused parts for racing bikes as costs against the company but still kept the components in its inventory. According to The Japan Times, the only way this would have been allowed under accounting rules was if the business had gotten rid of the parts.
“Although there was a difference of opinions, we filed corrected tax reports and paid all of the money levied,” a Suzuki company official said about the investigation to The Japan Times.
The latest punishment is a further blow after an already rough year for Suzuki. In May, the company admitted that it had used non-compliant methods for testing fuel economy on 16 models available in Japan. The company claimed it was an inadvertent error due to the way the engineers calculated data during evaluations of a model’s rolling resistance and air resistance. The windy location of the automaker's test track also allegedly played a role in the issue.
The fuel economy scandal’s fallout was enough for CEO Osamu Suzuki to step down from the role after 40 years at the helm. He remained chairman of the business, though. The company’s top executives also gave up their bonuses from the 2015 financial year, and senior management reduced their bonuses by half.
Before these problems, rumors early in 2016 suggested that Suzuki might partner with Toyota in a complete takeover of Daihatsu. However, the plan didn't actually happen. Instead, Toyota pursued the deal alone and staged a buyou of its long-time partner.
Source: The Japan Times