Lone Star failed to pay $140 mln in Japan tax-media

TOKYO (Reuters) - U.S. investment fund Lone Star [LS.UL] has been accused by Japanese tax authorities of dodging $140 million in taxes on profits it gained when it owned midsize lender Tokyo Star Bank 8384.T, media reported on Monday.

Public broadcaster NHK said that the Tokyo Regional Taxation Bureau was pursuing the Dallas-based fund for deliberately avoiding paying 14 billion yen ($140 million) in taxes on profits gained from collecting on collateralised non-performing loans.

Lone Star has since sold Tokyo Star to Advantage Partners, Japan's biggest private equity firm, for 248 billion yen.

NHK said the tax bureau believes the profits were transferred by Lone Star through a unit in Ireland to a Bermuda-based fund.

The Tokyo Regional Taxation bureau declined to comment and Lone Star officials were not immediately available for comment.

NHK quoted an unidentified Lone Star spokesman as saying the fund believed it did not owe the taxes as the company that was the subject of the tax investigation was not active in Japan.

The tax authorities are having difficulties compelling Lone Star to pay the taxes as the fund is based overseas and is not responding to their demands, NHK added.

(Reporting by Edwina Gibbs)