Mitsubishi Oil Co. confirmed Tuesday that it has been ordered to pay 2.66 billion yen in additional taxes for deals it made with an Osaka oil broker who is now standing trial for income tax evasion.

The Tokyo Regional Tax Bureau has determined that about 5.16 billion yen Mitsubishi Oil paid to broker Junichi Izui was taxable entertainment spending disguised as commissions for oil deals, tax authority sources said.

Mitsubishi Oil said in a statement, however, that the incident will have no impact on its earnings projection for the year to March 31 that was announced in January. The company will respond appropriately to the tax office’s order after carefully studying its contents, it said.

Mitsubishi Oil allegedly faked transactions with Tokyo-based Mitsui Mining Co. and Izui’s company in Osaka, trying to pass off the money given to Izui as commission fees, the sources said.

Mitsubishi Oil recorded the money as part of expenses on its books. But the tax bureau is believed to have classified the money as entertainment expenses, arguing that Mitsubishi Oil bought oil back from Izui’s company for more than it sold it to him, the sources said.

The tax bureau last year collected about 60 million yen in additional and penalty taxes from Mitsubishi Oil, which is also based in Tokyo, concluding the company had concealed 120 million yen in income in the year to March 1990.

The money was collected separately from additional taxes on its hidden income in later years because of the period of prescription. Izui has admitted he used part of the money he obtained from Mitsubishi Oil for lobbying activities in political and bureaucratic circles.

Izui is a lobbyist who threw parties for between 400 and 500 sporting, political and governmental figures. He also made large donations to politicians.

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