Japan's Dentsu, others indicted over alleged Olympic contract bid rigging

 

[February 28, 2023]  By Satoshi Sugiyama and Kaori Kaneko

TOKYO (Reuters) -Japanese prosecutors on Tuesday indicted six companies including advertising giant Dentsu Group and seven individuals over the suspected rigging of bids worth $320 million for the Tokyo 2020 Olympics and Paralympics.

The indictments follow months of investigations into alleged corruption in the planning and sponsorship of the Tokyo Games, held in 2021 after a COVID-19 postponement.

In response to the indictment, Dentsu said it had set up a committee of outside experts, chaired by a former Supreme Court judge, to review and investigate the case. Dentsu Japan's CEO and other executives would also return a portion of their compensation for six months, it said.

"The company takes this situation seriously and offers its sincere apologies to its business partners, shareholders, and all other relevant parties for any inconvenience or concern this may cause," Dentsu said in a statement.

Hakuhodo DY Holdings Inc, Tokyu Agency Inc, Fuji Creative Corporation, Cerespo Co and Same Two Inc were also indicted, along with officials who were in charge of the bidding at the time, prosecutors said.

Hakuhodo, Tokyo Agency and Fuji Creative Corp parent Fuji Media Holdings also issued statements of apology. Cerespo had no immediate comment, while Same Two declined to comment.

The Tokyo Games have also been tainted by a separate scandal in which Haruyuki Takahashi, a former member of the Tokyo 2020 Olympics board and an ex-Dentsu executive, was arrested last year on suspicion of receiving bribes from Olympic sponsors.

A man speaks on his mobile phone near a logo of Dentsu Co. at the entrance of the company headquarters in Tokyo July 12, 2012. REUTERS/Issei Kato

Tuesday's indictment came after Japan's Fair Trade Commission filed a criminal complaint against the companies and individuals, citing a "huge" societal impact and the size of the contracts.

It said the collusion took place in 2018 and covered contracts estimated to be worth a total of 43.7 billion yen ($320.33 million), including some for test events ahead of the Games.

"We determined that this is a malicious and serious case that will have a broad impact on people's lives," commission investigator Goh Okumura told a media briefing.

Dentsu, Cerespo and Fuji Creative have already been barred from bidding for contracts at the industry, foreign and education ministries for nine months.

Executives from advertising firm ADK Holdings, business suits retailer Aoki Holdings and publishing firm Kadokawa have been arrested in connection with the separate bribery case.

($1 = 136.4200 yen)

(Reporting by Satoshi Sugiyama, Kantaro Komiya, Kaori Kaneko, Tim Kelly; Writing by Chang-Ran Kim; Editing by Edwina Gibbs, Robert Birsel)

[© 2023 Thomson Reuters. All rights reserved.]
This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.