Mugen (Honda) in Trouble

[vatuloa]

This is a real shame they did a lot for F1

F1's Mugen in tax evasion scandal
From correspondents in Tokyo
September 5, 2003

FORMER Honda-owned Formula One engine supplier Mugen is to hand over all of its operations to a new company following the arrest of its president for massive tax evasion.

The new firm, named M-TEC, will be set up on October 1 and based at Mugen's headquarters in Asaka on the northern outskirts of Tokyo, while retaining Mugen's brand name and 150-strong workforce, a company statement said.

Mugen board member Shin Nagaosa, 54, will become president of the new firm which will be capitalised at $256,000 and strive to secure "transparency" in management, the statement said.

"We will not just seek a new image or frame of mind. We need to create a new environment in which we work flat-out to maintain good relations with our associates," Nagaosa said.

Mugen president Hirotoshi Honda, the eldest son of Honda founder Soichiro Honda, and auditor Norio Hirokawa were indicted in July on charges of evading one billion yen in corporate tax.

Honda 61, earlier said he would step down as Mugen head although he had never been involved in the case.

"We reached the conclusion that a new entity is necessary to continue our operations while being involved in criminal and civil court proceedings over the charges," Nagaosa said.

The indictment said Honda conspired with the auditor to hide billions of yen of the company's income to evade taxes by moving the funds to a subsidiary under the guise of payments for machine-leasing and other transactions in the three years to October 2000.

Mugen, meaning infinity, was established in 1973 as a key affiliate of Honda's racing division.

After a brief F1 stint, Mugen re-entered the premier motorsport circuit in 1975 with the Ligier team.

Mugen-powered machines won four F1 races before the company pulled out at the end of the 2000 season, making way for Honda's full return to Grand Prix racing.

Mugen has since been producing engines and machines for races, mainly the Formula Nippon series, in a tie-up with Honda

[neilap]

I dont think this will have an affect on their sporting ventures. I hope not, anyway. To my understanding the name/image change is the biggest change of all.

[Smokey 6 litre]

i thought this was around a while ago, or is this something new, the Honda engine isn't giving as much as it promised a few years ago.

[Adam43]

I thought I'd heard this a few months back.

vatuloa, can you provide us witha link or a source reference please.

[Adam43]

Thinking about it I think the difference with this new story is the new company, M-TEC, replacing Mugen.

[903cc]

I read about this yesterday. Basically M-Tec equal Mugen. The problem is Mugen are in deep and cannot trade anymore so the assest are transferred to a new company (with a lot to do with Mugen) and the problem is solved. Looks like the Son of Honda will have a big headache for a few years. He and his auditor were doing some fiddling of the books.

[climb]

It depends on what part of the management is involved in the scandal.
Should it concern some key staff, then it could be dangerous, otherwise i agree that it's only a shame that such a renowned brand like Mugen disappear from motorsport.

[vatuloa]

The artical in the heading came from Foxsports

[kristof14]

As it says they're retaining the Mugen brandname does this mean that all their engines etc. will be branded Mugen or M-TEC?

[neilap]

As far as I know the Mugen name will not be used anymore. Besides that everything and everyone else stays the same, with the exception of Mr. Honda.

[kristof14]

If the Mugen name isn't being used any more why are they going to be retaining the Mugen brand name?

[neilap]

Originally posted by kristof14
If the Mugen name isn't being used any more why are they going to be retaining the Mugen brand name?

You're correct. Here is a link that will answer most of our questions.