Toyota Motor Corporation is expected to agree to pay a record fine of $16.4 million, for not informing the US federal authorities for four months of defective gas pedals on its vehicles.
The fine, the largest ever imposed by the by the US Department of Transportation on a carmaker, will not be the only legal woes to hit the Japanese carmaker as it is likely to be slapped with additional fines by the National Highway Traffic Safety Administration as well as intense scrutiny by the US Securities and Exchange Commission.
Earlier this month, the Department of Transportation had said that it would levy a fine of $16.4 million on Toyota for delaying a mass recall of the vehicles with defective accelerator pedals, which, the regulator said the company was aware of. (See: US regulators seek record $16.4 million fine on Toyota for vehicle defects)
Although the fine is a mere $16.4 million, compared to the $25 billion cash on hand that the world's largest carmaker has currently in its books, it will make a massive dent in the carmaker's image.
As per a US law, the maximum fine that can be imposed on a carmaker for breach of US safety regulations is $16.4 million. Analysts say but for the cap on the fine, Toyota would have ended paying $13.8 billion, $6,000 for each of 2.3 million vehicles sold with defective pedals. (See: Toyota recalls another 2.3 million vehicles) This would be over and above the billions of dollars it is likely to pay in the pending cases filed in courts all over the US and Canada, they aver.
The carmaker is facing 138 potential class-action lawsuits over falling vehicle values and about 100 cases in federal courts for injury and wrongful death caused by acceleration problems.
According to the US media, Toyota has agreed to pay the fine rather than being hauled to court, but nevertheless, by agreeing to pay the fine, the car maker is admitting to its guilt, which will strengthen litigant's hands, who have filed hundreds of suits against the company.