Tax authorities have filed a criminal complaint with public prosecutors against the medical preparatory school group Tecom on suspicion of hiding about 950 million yen in revenues and evading more than 300 million yen in taxes, industry sources said Monday.
Three Tokyo-based firms in the Tecom (Training Education Center of Medicine) group have already paid about 400 million yen in back taxes and penalties, the sources said.
The Tokyo Regional Taxation Bureau filed the complaint against the three firms and Masayuki Nakayama, 57, president of a core Tecom company, saying the firms had declared very little of their revenue, they said.
The companies underreported revenue by declaring fictitious or padded deals among group companies for three or four years until the last business year, the sources said.
The firms had large amounts in their bank accounts despite small figures in their tax reports, the sources added.
A certified tax accountant for the group confirmed that tax authorities have accused it of intentionally evading taxes. The group has paid the back taxes and penalties, the accountant added.
The Tecom group contains about 20 companies. Starting with the opening of its first school in 1977 in Tokyo's Shinjuku district, the group opened prep schools in many parts of Japan for students taking state examinations to become doctors, dentists, nurses and pharmacists.
The core firm, which gives management instructions to group companies directly operating the schools, actually had 2.2 billion yen in income annually for the past several years, according to a private credit research agency.