Tue, Jan 24, 2006 - Page 1 News List

Yamaha accused of illegal China sales

AP AND BLOOMBERG , TOKYO

Japanese police raided the headquarters of Yamaha Motor Co yesterday morning on suspicion that the company illegally exported to China remote-control helicopters that can be diverted to military use, officials said.

Yamaha, the world's second-biggest motorcycle maker, will be charged with violating export laws by selling equipment that could have military purposes, the Ministry of Economy, Trade and Industry said in a faxed statement.

Yamaha director Toyoo Otsubo said the helicopters are for civilian use and the company did not violate the law, adding: "We are fully cooperating in the investigation."

A report in the Asahi newspaper said the helicopters were for spraying pesticides but could be converted to spread chemical weapons or engage in spying.

"It is extremely regrettable that equipment that could be diverted to weapons of mass destruction has been allegedly exported to China," Chief Cabinet Secretary Shinzo Abe said. "I hope the investigation will reveal the whole truth."

If proven guilty, the company may be fined as much as ?80 million (US$693,000) per helicopter, according to Bloomberg calculations based on a formula provided by the trade ministry. Executives found responsible could also be imprisoned for as long as five years, the trade ministry said.

Yamaha said it sold the nine helicopters to a Beijing-based film company which used them to shoot footage for ads and TV dramas.

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