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Son of Honda Motor founder
arrested over tax evasion

Posted: 3:13 PM (Manila Time) | Jul. 01, 2003
Agence France-Presse

TOKYO - Japanese prosecutors on Tuesday arrested Hirotoshi Honda, president of Formula One engine supplier Mugen and the eldest son of the founder of Honda Motor, over a massive tax evasion.

The arrest came hours after prosecutors launched a criminal investigation into Mugen, which has business relations with Honda Motor Co. Ltd., on suspicion of dodging 600 million yen (five million dollars) in corporate taxes.
"Our lawyer was informed by prosecutors about the arrest of our president today," said a spokesman for Mugen, based in Saitama, north of Tokyo.

"But we believe he is innocent as there is no evidence proving his involvement," said the spokesman who declined to be named. "Facts will become clear after investigators probe the case carefully."

Norio Hirokawa, 60, the company's auditor, was also arrested over his alleged involvement in the tax evasion.

Television footage showed a dozen prosecutors entering the Tokyo house of the 61-year-old Mugen president and eldest son of the late Soichiro Honda, who founded the nation's third-largest automaker.

Mugen, meaning infinity, was established in 1973 as a key member of Honda's racing team factories.

The company has been involved in manufacturing, supplying and developing car engines for F-1 races for Honda and its group firms. Mugen engines have won four F-1 races.

Prosecutors suspect Mugen hid its income by moving funds to a company named MG Estate under machine lease and other fictitious transactions for three years through to December 2000, Kyodo News Agency said.

Hirotoshi Honda is a board member of MG Estate, which has since been renamed GE Seirijigyosha.

Honda reportedly denied the allegation.

"I apologize to the public for causing trouble," Hirotoshi Honda said in an interview with Jiji Press in February. "But I have never filled my own pocket. I have not been involved in the case."

Mugen reported sales of about 6.8 billion yen for the financial year to October 2001.
Honda Motor has pulled its capital from Mugen, but still teams with the firm to participate in auto races.

A Honda Motor spokeswoman said: "We cannot comment immediately as we just heard the news."

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