Kajima bribed Indonesian tax officials, report says

Kajima bribed Indonesian tax officials, report says

TOKYO (AFP): Major Japanese contractor Kajima Corp. paid 80
million yen (US$660,000) in suspected illegal bribes to
Indonesian tax authorities, a report said Wednesday.

"Kajima made questionable payments to local tax authorities so
they would underestimate the company's taxable income," the
Yomiuri Shimbun said, citing Tokyo tax authority sources.

Kajima accepted it made the payments but said they were made
to settle tax claims.

"It is true that we gave money to the Indonesian authorities
to settle tax negotiations but I cannot confirm the amount of
money involved," a spokesman said.

Japanese tax authorities ordered Kajima to pay an extra 40
million yen in additional taxes, including punitive taxes for the
Indonesian payments, the paper said.

The payments suggested deep-rooted corruption by the
Indonesian tax authorities and their collusion with Japanese
construction firms, the paper said. Such payments were routine
for Japanese firms working in the country.

Other Japanese constructors have also been implicated in
suspected illegal payments to Indonesia.

Kajima won 21 construction contracts in Indonesia between 1994
and 1997 worth a total 22 billion yen, the paper said.

The contractor has warned it is facing worse-than-expected
earnings in the past financial year to March because of poor
profits at subsidiaries.

Kajima predicts a heavy group net loss of 200 billion yen, on
sales of 1,650 billion yen.