Major bank failed to declare income

The Bank of Tokyo-Mitsubishi failed to declare some 6.5 billion yen in income in the three years through March 1999, about 400 million yen of which was regarded by tax authorities as concealed on purpose, sources close to the case said Thursday.

The Tokyo Regional Taxation Bureau imposed an estimated 2.5 billion yen in penalty taxes on the leading Japanese commercial bank.

Bureau investigators found that the bank had transferred around 400 million yen to overseas subsidiaries to cover their losses, the sources said.

In the process, the bank made the sum look like profits earned by subsidiaries in financial derivatives trading, or commissions paid to them for screening applications for loans to finance projects.

The investigators concluded that the sum should have been registered on the bank’s earnings reports.

The investigators also determined that the bank had failed to declare the remaining 6.1 billion yen as a result of accounting errors, the sources said.

A spokesman at the bank attributed the tax problem to “the difference of opinion between us and the tax authorities.”