Shiki Publishing Inc. failed to declare about 290 million yen in income over a three-year period to April 2001 and dodged some 90 million yen in corporate taxes, sources said Wednesday.
Tax authorities have filed criminal complaints with the Tokyo District Public Prosecutor's Office against the firm and its president, Hiromi Segawa, following revelations the firm hid income by booking expenses for fictitious advertising and publicity fees, they said.
Shiki Publishing has reportedly admitted to the allegations and has revised its earnings reports, the sources said, adding it will be fined about 120 million yen in punitive taxes.
The company markets books featuring personal testimonials for various health products. These recommendations are supplied by health food companies for promotional purposes.
The books also contain contact telephone numbers for manufacturers of the products as part of a reported tieup arrangement aimed at promoting the goods, the sources said.
Tax investigators found that the publishing house padded tax-deductible expenses such as advertising costs to reduce its corporate tax bill, but they provided no specific details.
In January, Tokyo tax authorities filed criminal complaints against Hoshida Kagaku Co., a health supplement sales company based in Tokyo; its affiliate Satera Co.; and Kazuaki Yamada, president of the two companies. The two firms and Yamada were accused of concealing about 1.6 billion yen in income earned through phone sales of agaricus mushrooms for two years through 2000.
No information was provided about the possible connection between the publishing house and the other parties facing charges over the concealment of income.