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Update on an older story:




Son of Honda Motor founder
cleared of tax scandal

5/25/2006

TOKYO--The son of Honda Motor's founder was found innocent Thursday of charges of massive tax evasion, but his firm, auto race parts supplier Mugen, was fined more than two million dollars.

A court said doubts remained as to whether Mugen president Hirotoshi Honda, 64, conspired with an auditor to hide 2.83 billion yen (25 million dollars) of company income to evade taxes, as prosecutors alleged.

"Rational doubts remain if we were to recognize the alleged conspiracy," said presiding judge Yasuo Shimoyama of the Saitama District Court near Tokyo.

Shimoyama, however, ordered Mugen to pay 240 million yen (2.13 million dollars) in fines over the evasion. The judge earlier ruled that auditor Norio Hirokawa played the central role in the scheme, which involved moving funds to a Mugen subsidiary under the guise of payments for machine-leasing and other transactions for three years to October 2000.

The auditor received three years in jail.

Prosecutors have alleged that Hirotoshi Honda approved the transactions, although he has claimed he was also a victim and only signed the tax documents prepared by his auditor without knowing about the crime.

Since his arrest in 2003, Hirotoshi Honda has stepped down as the company president, with Mugen's operations transferred to a new firm led by a former Mugen executive.

Hirotoshi Honda is the eldest son of Soichiro Honda, founder of Honda Motor Co. Ltd., Japan's third largest automaker. Mugen, meaning "infinity" in Japanese, was established in 1973 as a key affiliate of Honda's racing division.

After a brief initial F1 stint, Mugen re-entered the premier motorsport circuit in 1975 with the Ligier team.

Mugen-powered machines won four F1 races before the company pulled out at the end of the 2000 season, making way for Honda's full return to Grand Prix racing.

Mugen has since been producing engines and machines for races, mainly the Formula Nippon series, in a tie-up with Honda.
 

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This is the first I've heard of any of this. Sorta tarnish's the Mugen nameplate allthough all big companies are tax evaders
 

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Isn't that Mugen officially dead, replaced by M-TEC? The M-TEC was formed when the scandal was first in its investigation phase. I think Hirotoshi did the right thing of not letting the Mugen closed down and change its name to M-TEC, there's just too much talent on that place.
 
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