TMT president admits law firm paid US$18 million, says MP

The House Anti-Corruption and Misconduct Committee (ACMC) released an update on its investigation of a Supreme Court case involving Toyota Motor Thailand (TMT), the Customs Department, and allegations of bribery to avoid paying import taxes.

Right: Teerajchai Phunthumas

On 8 September, a TMT representative testified to the ACMC about the company’s alleged bribery of several high-ranking judges to secure a favourable ruling in a case involving tax duties on the import of spare parts.

Teerajchai Phunthumas, a Move Forward Party (MFP) MP and ACMC member, reports that the Court of Justice secretariat was also called upon to testify so that matters could be clarified for the public.

Teerajchai said that the committee heard testimony from Mr. Noriaki Yamashita, the president of TMT, as well as the legal officers involved in the preliminary hearings and the appeals process.  He added that the Prosecutor’s Office had reopened the case, which was now under the consideration of the Supreme Court.

According to Teerajchai, Mr. Yamashita acknowledged that TMT made a payment of US$18 million to a local law firm, the Annanon Legal Office.   Earlier reports note that Annanon had been promised a total of US$27 million dollars to successfully move the case through the appeals process.

Teerajchai added that Mr. Yamashita had only just assumed his position, that the Annanon Legal Office was no longer handling TMT affairs, and that individuals involved in the case were no longer with the firm. Annanon was also immediately unable to account for its sharp increase in income during the timeframe of the case.  Firm earnings reportedly rose from a few hundred thousand baht to well over 100 million baht within the space of a few years. 

The MFP representative said further documents and testimony from TMT are still needed, while adding that those found guilty of wrong-doing would be held accountable for their actions.

According to a report published by the Bangkok Post last May, the case stems from a TMT decision in 2010 to import parts for the local production of its Prius hybrid model. Under the terms of the Japan-Thailand Economic Partnership (JTEPA) agreement, the parts were eligible for import tax reductions.

In 2012, the Laem Chabang Port Customs Bureau found that TMT was circumventing an 80% import tax on finished automobiles by bringing in knocked-down vehicles for reassembly in Thailand.  The Bureau estimated that TMT imported some 20,000 cars in this manner, leaving the company with an eleven billion baht tax bill.

TMT countered that the agreement was open to interpretation and asked the Customs Department for a clarification in late 2013.

In June 2015, the company also filed a case against the Customs Department in the Central Tax Court, insisting that it had paid the correct tax rate and that the Department’s additional tax assessment was unfair.

The courts initially ruled in favour of TMT in September 2017 but the decision was later overturned after an appeal from the Department.  TMT appealed the ruling in turn.

In April 2020, Toyota Motor Corporation informed the US Securities and Exchange Commission and the Department of Justice that TMT might have violated the Foreign Corrupt Practices Act.

March 29 of this year, a US-based news agency Law360 reported that Toyota Motor Corp had retained Wilmerhale Corporation to conduct an internal probe, which alleged that a TMT consultant company paid bribes to several Thai judges and officials in a bid to overturn the Prius case ruling.

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