Toyota issues Iran apology

Khodrocar - The sale took place in the fiscal year ended March 31, 2017.

Since February 2013, the US has been discouraging US and foreign companies with operations in that country from entering into transactions with Iran as part of the economic sanctions designed to stop it from acquiring nuclear weapons capability. The economic sanctions have continued even after President Donald Trump certified in July that the Islamic republic was in compliance with the nuclear deal signed in 2015.

Under Section 13(r) of the Securities Exchange Act of 1934, companies that make filings with the SEC are required to disclose contracts, transactions and "dealings" with Iranian and other entities since February 6, 2013 when the section came into effect.

In a filing with the Securities and Exchange Commission of the US on Monday, Toyota Motor said the sale of the Toyota vehicle to the Iranian embassy by its Indian majority-owned subsidiary "contributed approximately ¥2 million (roughly Rs 11.4 lakh) in gross revenues and an insignificant amount in net profit to Toyota. Toyota believes this transaction would not subject it or its affiliates to US sanctions".

The sanctions that the filing talks about stem from a US legislation called the "Iran Threat Reduction and Syria Human Rights Act of 2012".

The filing went on to add: "Toyota Kirloskar Motor Limited intends to cease conducting the activity described above".

It is not known whether the Japanese parent has issued any such instruction to the Bangalore-based subsidiary which has two plants with an installed capacity to make over 4 lakh units every year.

Toyota Motor Corp has an 89 per cent stake in TKML with the remaining held by the Kirloskar group. In September, TKML reported a 4 per cent increase in vehicle sales at 13,678 units.

An e-mailed questionnaire to TKML did not elicit any response till the time of going to press.