Japan’s fair trade watchdog said on Thursday (Mar 7) Nissan Motor had violated the subcontractor act by underpaying dozens of suppliers by about 3 billion yen (S$27.09 million) in total.

The Japan Fair Trade Commission, which local media reported this week was investigating Nissan’s conduct, said the automaker had unlawfully deducted the amount from 36 suppliers over a roughly two-year period from January 2021.

It also called on Nissan to set up a management system for dealing with subcontractor payments, and for the board of directors to pass a resolution to recognise the issue and prevent it from happening again.

Nissan, Japan’s third-largest automaker by volume, said it had fully refunded suppliers for money that it had unilaterally deducted, that it took the announcement from the watchdog very seriously and would strengthen its inspection system.

Japan’s Subcontractor Law prohibits the ordering party from unilaterally reducing the payment when the subcontractor is not at fault. REUTERS