A business group that maintains traffic control systems in eastern Japan is suspected of evading 500 million yen in taxes and hiding more than 1 billion yen in income, informed sources said April 13.

What's more, industry sources say the Nihon Kotsu Kansei Gijutsu (Japan Traffic Control Technology) group based in Yokohama nurtured cozy relations with police departments to monopolize traffic light maintenance orders in Aomori, Yamagata, Fukushima, Kanagawa and Niigata prefectures last fiscal year.

Seven board members of the group companies are former officials of the Chiba, Aichi, Aomori, Fukushima, Kanagawa and Niigata prefectural police forces, they said. The sources said former Justice Minister Akira Hatano and Tadao Ando, former Cabinet councilor for crisis management, both former Metropolitan Police Department chiefs, also have been listed as advisers to the group.

The group companies are suspected of recording fictitious orders in their accounting books, hiding more than 1 billion yen in income and evading 500 million yen in corporate taxes, the sources said. According to a private credit research firm, Nihon Kotsu Kansai Gijutsu was founded in 1967 and capitalized at 90 million yen.

The entity registered sales in fiscal 1997 of 2.37 billion yen, all of which came from the prefectural police departments of Kanagawa, Aichi, Fukushima, Shizuoka, Gunma and Chiba, the credit firm said. Its four affiliates registered sales of 1.34 billion yen from the MPD as well as the Aomori, Yamagata and Niigata prefectural police, it said.