(Bloomberg) -- The Japan Fair Trade Commission reprimanded Nissan Motor Co. over its practice of slashing payments to top suppliers by about ¥3 billion ($20.3 million).

Nissan violated the Subcontract Act by targeting 36 tier-1 suppliers from January 2021 to April last year, according to the commission’s findings. The Japanese company, though, said it refunded the amount to suppliers last Jan. 31.

“Nissan has been paying less to the suppliers since even before Ghosn’s era, but the company is unaware of the timing and that the act was illegal,” said Senior Subcontracts Inspector Yoshifumi Kanno during a press briefing in Tokyo, referring to Nissan’s former Chairman Carlos Ghosn.

The commission urged Nissan to conduct regular audits and training to prevent future violations, it said. The commission said it plans to spread awareness about the issue among Japan Automobile Manufacturers Association members after discovering similar violations at other automakers.

Nissan, in a press release, said it “will strengthen its compliance system.”

“Suppliers are often afraid to speak up about such violations for fear their trade contracts may get terminated,” Kanno noted.

At a time the Japanese government is urging companies to increase salaries to counter inflation, cutting payments to suppliers is “disappointing,” Kazuyuki Katagiri, the commission’s director general, said.

©2024 Bloomberg L.P.