Japan's Fair Trade Commission has launched an investigation into Bigmotor Co.'s business practices as the scandal-hit used car dealership and repair chain is suspected of infringing on the profits of subcontractors, sources familiar with the matter said Saturday.
Bigmotor, embroiled in a scandal over excessive repair fees and auto insurance fraud, may have forced its subcontractors to lower prices and have their company vehicles undergo periodic inspections at its workshops, according to the sources.
The fair trade watchdog could issue an advisory if a violation of the subcontract law is confirmed. The law stipulates fair business transactions between prime contractors and subcontractors.
The transport ministry in late July conducted on-site inspections at Bigmotor dealerships across the country amid allegations that the Tokyo-based company charged excessive fees after intentionally damaging vehicles and made fraudulent insurance claims.
The Financial Services Agency is also probing insurance companies that engaged in business transactions with Bigmotor.
Roadside trees in front of numerous company dealerships were also found to have withered unnaturally and local authorities across Japan are looking into possible causes, amid suspicions that the company damaged them to allow for an unimpeded view of its used cars.
Bigmotor later admitted to spraying herbicides without permission in some cases.