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TV Asahi Corp. hid 137 million yen in taxable income by booking fictitious subcontracting fees over three years to March 2005, sources said Thursday.

Including technical accounting errors, the major network failed to declare 155 million yen over the period and was charged 59 million yen in back taxes, the sources said.

The company said the same day that it will fire a 59-year-old chief producer, effective Friday, for repeated accounting irregularities and cut the salaries of 12 officials, including company executives.

“We have betrayed our viewers’ trust. We deeply apologize for that,” TV Asahi President Masao Kimiwada said at a news conference.

According to the sources, the producer in question told subcontractors to pad their bills, which TV Asahi paid in full. The Tokyo Regional Taxation Bureau found some of the claims to be fictitious.

The producer, whose name was not provided, was also accused of being lavishly entertained by the TV production companies allegedly involved in the scam.

Separately, two companies that produce a lot of TV Asahi programming, including Super Produces Inc. of Minato Ward, Tokyo, hid a combined 300 million yen in taxable income, the sources said without identifying the programs.

The two companies paid excessive fees to subcontractors and had them bear the cost of entertaining those who made the programs. Tax authorities determined the costs should have been included in taxable expense accounts.

In 2004, TV Asahi and three other private TV broadcasters hid 200 million yen to 300 million yen each in taxable income, mostly by padding production costs.

Earlier this year, NHK was found to owe 270 million yen in unpaid consumption taxes over a three a three-year period through March 2004.

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