Question 3 Government Around the World Are Becoming Increasingly Sensitive to the Loss of Revenue Resulting from Multinational Companies Moving Into Other Jurisdictions, Most Particularly Tax Havens, to Lower Their

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Case study of Japanese bribe

The case basically talks about the “bribe” in Japan by the Lockheed Aircraft Company. Mr. A Carl Kotchian is the president of the company. In 1970 they were saved from bankruptcy emergency government loan of $250 million. In order to save from financial disaster Lockheed is desperately looking to sell it air craft in major Japan airline. Eventually Kodama succeed in entering in to contract sell Lockheed aircraft in Japan with $9 million bribe to the Prime Minister Kukeo Tanaka and other government official, they knew that by paying the bribe they were sure that they will get the contract to sell their plane in All-Nippon Airline.

Officials from private trading company advised about the bribe, but Mr. A Carl Kotchian says that it was the “Japanese Business Practice” in which local consultant is in more supportive to keep in with local “business practice”

US investigate and found $22 million as bribe or secret payment but they mention it as “marketing cost in their books of account. Internal Revenue Codes states it as bribe which is directly paid to the officials and employees. But however it was not considered as bribe during that time for no us enact rules by US government. But due to guilt of bribe Mr. Kochian was resign with the pressure from board of directors and Kodama was arrested.

Mainly there are three main stake holders;

1. Mr. A Carl Kotchian who was the president of Lockheed Air Craft Company who bribe different Japanese parties to sell his product in Japan

2. japanese parties which includes Prime Minister Kukeo Tanaka and his officials enter in to the contract to buy air craft from Lockhood Company

3. Yoshio Kodama the consultant of Lockheed Company to engineering the contract of Lockheed Company with Japanese parties.

Highlights of the case

Mr. A Carl Kotchian…...

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