A Japanese supercomputer venture whose president has been arrested for allegedly defrauding the government of subsidies is now suspected of evading corporate taxes, sources said Sunday.
Pezy Computing may have squeezed the company's income by padding outsourcing costs to its affiliates and evading several hundred million yen in taxes, the sources said, adding that Tokyo prosecutors and tax authorities were looking into the flow of funds.
Motoaki Saito, president of the venture, and former executive Daisuke Suzuki were arrested last month for allegedly bilking the state-backed New Energy and Industrial Technology Development Organization (NEDO) out of about ¥431 million ($3.9 million) after padding costs related to the company's business.
Earlier this month, the Tokyo District Prosecutor's Office served fresh arrest warrants to them for allegedly swindling the state out of ¥191 million in subsidies.
Pezy Computing is part of the team that developed the Gyoukoku supercomputer, which was last November ranked the world's fourth-fastest supercomputer.
The venture and two other firms run by Saito were set to receive some ¥3.5 billion in subsidies from NEDO and ¥6 billion in interest-free loans from the state-backed Japan Science and Technology Agency, an arm of the education ministry.