Dozens of former and current employees of Recruit Co., a major information service firm, have been accused of failing to declare billions of yen in profits from selling their holdings of the company's unlisted shares, sources close to the case said Sunday.

Each worker is believed to have obtained tens of millions of yen in profits when they sold the shares to an association of Recruit employees holding the company's shares, the sources said.

The National Tax Agency suspects that hundreds of other former Recruit workers may also have failed to declare such income, they said, and the agency's probe is continuing.

Recruit's public relations department said it regrets the problem, although the firm added it is primarily the responsibility of individual employees and former employees to declare their income properly.

According to Recruit, people so far probed by the tax authorities are former and current workers of the company who sold the shares to the stockholders' association when they left Recruit or its affiliates.

Recruit shares are not publicly traded. Employees can trade the shares only with the stockholders' association, and they are obliged to sell their holdings to the association when they leave the company.

Most of the current and former employees that have been investigated purchased the shares when their prices were still low.

Currently, a Recruit share is priced at 5,000 yen -- more than 20 times higher than it was 20 years ago, according to the Asahi Shimbun. Each of those employees is believed to have obtained around 30 million yen when they sold the shares, the daily said.

In September, tax authorities ordered the company to provide records of transactions by the stockholders' association, which then submitted records on some 3,300 cases that took place over five years through 2002, the sources said.

After checking the records, the tax authorities imposed additional taxes on people who either failed to declare any of the gains from the share sales or underreported the amount, the sources said.

"(The problem) is regrettable because we have urged our employees to properly declare their income. We will take further steps to raise the employees' awareness on taxation," the company said.

The Recruit group was rocked in the late 1980s by a massive scandal involving the sale of preflotation shares of its real estate unit, Recruit Cosmos Co., to dozens of influential lawmakers, bureaucrats and business leaders.

In many of the cases, the share sale was deemed a form of bribery because the shares were certain to rise in value when Recruit Cosmos went public.

The scandal led to the fall of the administration of Prime Minister Noboru Takeshita, and Recruit founder Hiromasa Ezoe was given a suspended prison term for bribery in March 2003 at the end of a marathon trial.