Nissan: 'No Comment' On Mitsubishi Takeover

Japanese carmaker Nissan has refused to be drawn on reports it is in talks to buy a controlling stake in scandal-hit Mitsubishi Motors.

The company told Sky News it would not comment on a claim by Japanese broadcaster NHK that Nissan may invest more than $1.8bn (£1.3bn) in its rival, at a time when Mitsubishi (LSE: 7035.L - news) is facing the fallout from a growing fuel economy cheating scandal.

Nissan has been a victim of the company's actions, given that Mitsubishi produces a number of models for the Nissan brand.

Mitsubishi admitted on Wednesday that its false reporting on fuel efficiency may now extend to all the vehicles it sold in the Japanese market but insisted it had abided by mileage-test requirements for all cars sold abroad.

It (Other OTC: ITGL - news) had previously limited the cheating to smaller models in Japan after Nissan alerted the firm to test discrepancies.

Mitsubishi, which is yet to respond to a request for comment on the reported talks with Nissan, was said by NHK to be mulling the sale of a 34% stake in the company which would make Nissan the top shareholder.

Mitsubishi is facing the prospect of massive fines in relation to the fuel scandal which, it has admitted, could date back 25 years .

It is also working on a plan to compensate customers.

Mileage fraud is a violation of Japan's fuel efficiency law for cars because buyers are eligible for tax breaks if a vehicle model delivers a certain efficiency.

It said that in some cases engineers simply made up false readings. Its Tokyo-traded shares have lost more than 40% of their value since the rigging emerged four weeks ago.

Mitsubishi is no stranger to controversy.

In 2004 it teetered on the edge of bankruptcy amid a series of huge recalls linked to a cover-up on historic defects including failing brakes and faulty clutches.

Its latest crisis comes amid widening concerns over irregularities among global car makers following Volkswagen (LSE: 0P6N.L - news) 's admission that it cheated on diesel emissions tests.

The German company reported last month its first annual loss for two decades after its provision for the scandal increased to €16.2bn (£12.7bn).