Nissan Motor had violated Japan's subcontractor act by underpaying dozens of suppliers by about JPY3bn (US$20.26m) in total, Reuters reported.

The Japan Fair Trade Commission said the automaker had unlawfully deducted the amount from 36 suppliers over a roughly two year period from January 2021, the report said.

The watchdog reportedly called on Nissan to set up a management system for dealing with subcontractor payments, and for the board of directors to pass a resolution to recognise the issue and prevent a repeat.

According to Reuters, Nissan said it had fully refunded suppliers for money that it had unilaterally deducted, that it took the announcement from the watchdog very seriously and would strengthen its inspection system.

Japan's subcontractor law prohibits the ordering party from unilaterally reducing the payment when the subcontractor is not at fault, the news agency noted.