Court reacts to Toyota bribery scandal

Court reacts to Toyota bribery scandal

Panel set up, accused judges file computer crime complaint

The Customs Department is a party to a case in which Toyota Motor Thailand has challenged its valuation of auto parts imports. Three Thai judges were allegedly involved in the case. (Bangkok Post file photo)
The Customs Department is a party to a case in which Toyota Motor Thailand has challenged its valuation of auto parts imports. Three Thai judges were allegedly involved in the case. (Bangkok Post file photo)

The Court of Justice has set up a 10-member panel to follow up on the Toyota bribery scandal while the accused senior judges are preparing to take legal action against people mentioning them by name, especially in social media.

Suriyan Hongvilai, spokesman for the Court of Justice, said on Saturday that the panel had been set up on Friday and tasked with checking and following up the case, according to Thairath Online.

Isra News Agency also reported that three Thai judges mentioned in a Law360 article about the possible bribery would ask the Court of Justice  on Monday to file a computer crime complaint with police to take legal action against those who mentioned them by name or shared such news on social media.

Chaisit Trachutham, one of the accused senior judges, confirmed with ThaiPBS on Friday that he had been involved in the case while serving as a senior judge on the Special Appeal Court.

He said he had been assigned to handle 10 cases involving Toyota Motor Thailand (TMT) on which he had split opinions.

The judges’ panel had a different opinion than that of the president of the Special Appeal Court, so the cases were brought to a meeting of the court.

At that meeting, Mr Chaisit said he had supported the case against TMT. After the discussion, a vote was taken and 60 of 70 judges present agreed the court should rule against the automaker.

In the interview with ThaiPBS, Mr Chaisit also questioned why TMT had not uttered a word, especially on the allegation that it had hired a law firm to lobby judges in a multi-billion-baht tax case and how much the law firm was paid.

Meanwhile, Slaikate Wattanapan, another judge mentioned in the report and a former Supreme Court president, told Thai media he had never discussed the Toyota cases with the other two judges.

Background

The case dated back to 2010-12 when TMT imported parts for its Prius model. The company declared them as auto parts eligible for hybrid car import tax privileges of 0% to 30% under the Japan-Thailand Economic Partnership (JTEPA).

But after rechecking, officials concluded they were not random parts to complement locally made parts in assembling a car.

In their view, the items were completely knock down (CKD) parts in matching quantities that could be assembled into cars. The law treats such parts as assembled cars.

Besides, the imported engines are coded 2ZR for the Prius model, with a capacity of 1,797 cubic centimetres. They decided TMT would be liable for an 80% import tax on complete cars under 1,800 cu/cm.

A probe by Laem Chabang customs officials found TMT had imported Prius parts 245 times, enough to make 20,000 cars. TMT was therefore asked to pay back taxes worth 11 billion baht. 

TMT argued that it imported the parts from Japan under the JTEPA. It said that the case was a matter of interpretation and that it had already sent clarifications and explanations to the Customs Department in late 2013.

In June 2015, TMT took the case against the Customs Department and its tax valuation panel to the Central Tax Court. The company insisted it had paid taxes correctly and customs officials had not challenged it at the time. Therefore, accusing it of intentionally evading taxes and demanding that it pay back taxes later was not fair, the company claimed.

The first court ruled in favour of TMT in September 2017. The Customs Department appealed and the Special Appeal Court overturned the first court’s ruling.

TMT appealed and the Supreme Tax Court accept its appeal on March 29 this year on the ground the rulings of the two lower courts were in conflict. The court gave the Customs Department until July 13 this year to file its account before the case is sent to the Supreme Court. 

In March this year, Toyota Motor Corporation, the parent company of TMT, disclosed in public filing that it had informed the US Securities and Exchange Commission and the Department of Justice in April 2020 that TMT might have violated the Foreign Corrupt Practices Act. It said it was cooperating with US authorities to investigate the case.

Law360, a US-based website on news and analysis for legal professions, first reported the case on March 29 this year. It reported Toyota Motor Corp had conducted an internal investigation six months before it reported to US authorities by hiring Wilmerhale Corp to probe the case. The investigation report claimed TMT’s consultant company had paid bribes to several Thai judges and officials in a bid to overturn the ruling of the Prius case.

On April 3, the Thai Court of Justice said it had yet to find more information on the allegation and vowed to take disciplinary action against the wrongdoers.

On May 26, Law360 reported federal prosecutors set up a grand jury in Texas to seek any evidence of the bribery involving top Thai judges to overturn the tax judgment.

In the same report, Law360, citing US official and documents related to the investigation, named the judges involved, as well as the Thai law firm, and claimed TMT had already paid $18 million of the $27-million contract with $9 million to be paid if Toyota won the appeal.


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