Softbank Group Corp. failed to report 93.9 billion yen ($877.57 million) in income over four years through March 2016, mostly collected by subsidiaries that are registered in tax havens, The Asahi Shimbun has learned.

Failure to declare revenue of such size is unusual, according to tax experts.

Softbank Group, led by Chairman Masayoshi Son, said it has already paid 3.7 billion yen in back taxes and penalties after the figure was offset by deficits the company had reported in the past.

The company was not levied a heavy additional tax, as the Tokyo Regional Taxation Bureau determined that Softbank Group’s undeclared income was not deliberate.

Softbank Group is the holding company of its telecommunication service subsidiaries, including Softbank Corp., Sprint Corp. and Brightstar Global Group Inc.

The underreporting concerns leading U.S. wireless carrier Sprint, which Softbank Group took over in 2013, and major U.S. cellphone distributor Brightstar, which it took over in 2014.

“We should have considered (tax declarations) after gaining a full grasp of income earned by all our overseas subsidiaries following our acquisitions of the companies,” a Softbank Group public relations official said in an interview with The Asahi Shimbun. “But we could not in a timely fashion because there were hundreds of companies under the umbrella of Sprint and Brightstar. We have already put measures in place to prevent a recurrence.”

Softbank Group says Sprint and Brightstar had set up their own subsidiaries in Bermuda, known as a tax haven, before it took them over. The claim has been backed up by other sources.

The U.S. companies had arrangements to divert part of the money they paid for business purposes to their subsidiaries in Bermuda so as to maximize profits.

But tax authorities regard the subsidiaries in Bermuda as virtual paper companies that were not involved in any substantial business activities.

On that basis, tax authorities ruled that the subsidiaries are subject to the anti-tax haven measure, part of the steps put in place to prevent companies and the super-rich from evading tax.

Under the measure, income earned by overseas subsidiaries with no substantial business activities is included in the earnings of their Japanese parent company for taxation.

The Tokyo Regional Taxation Bureau also designated another Brightstar subsidiary, which is based in Singapore and deals in distributing second-hand cellphones, a target of the anti-tax haven measures.

The subsidiary in Singapore is found to have had few business transactions with companies beyond its affiliates.

The combined earnings of Softbank Group after those by the subsidiaries in Bermuda and Singapore came to about 74.7 billion yen.

The total undeclared income amounted to 93.9 billion yen after improper accounting associated with proceeds from the sale of shares was included.

Nobuhiro Tsunoda, a senior official at KPMG Tax Corp. who is well versed in international tax and accounting, underscored the need for businesses to be equipped with sufficient professionals with expertise in taxation in mergers and acquisitions.

“Companies tend to pay more attention to the worth of an acquisition target and the price it will pay to take it over than to tax burdens it will have to shoulder, but they need to properly respond to the tax issue by assembling a group of personnel who are knowledgeable about the matter.”

The underreporting by Softbank Group comes at a time when tax authorities are enhancing their monitoring of attempts to avoid tax in cross-border transactions amid revelations in recent years by the International Consortium of Investigative Journalists, known as the Panama Papers and the Paradise Papers.

Japanese tax authorities are expected as early as September to begin exchanging information with their foreign counterparts on multinational companies, including their earnings, the amount of taxes paid and details of businesses, in each of the countries they operate.

According to the National Tax Agency, an average of 60 to 80 companies are found to have failed to report their earnings each year.

Those undeclared earnings amounted to 28.9 billion yen over five years by the end of June last year.

(This article was written by Yuta Hanano and Kosuke Tauchi.)