Tokyo prosecutors and the country’s fair trade watchdog on Friday searched the head office of ad giant Dentsu Inc. and the home of a senior official at the Tokyo Olympics organizing committee over alleged bid rigging for the rights to organize test events for the 2020 games.
In the latest development in a series of scandals surrounding the massive sports event, held in 2021 amid the coronavirus pandemic, searches were conducted on suspicion of unfair restraint of trade. They also covered Tokyo-based event production company Cerespo Co.
Photo taken on Nov. 25, 2022, shows the building housing the headquarters of Dentsu Inc. in Tokyo. (Kyodo)
Rigging is suspected in the 26 open bids held in 2018 for the rights to arrange test events, which were awarded to Dentsu and eight other companies, as well as a consortium. The test events for checking potential problems with operations, security and guiding audiences were carried out between 2018 and 2021.
The amount of the contracts totaled more than 500 million yen ($3.6 million), with the price of each ranging from 4 million yen to 60 million yen, according to sources familiar with the matter.
Dentsu won bids for five events for about 80 million yen, while Cerespo won another five for about 116 million yen on its own and one event under the consortium for 13 million yen.
Prior to the bids, the organizers, with assistance from Dentsu, had created a list of advertisers and event management firms that categorized the companies according to their respective experiences in each sport. The list is suspected to have been used in arranging successful bidders.
Dentsu admitted to being searched and said, “We apologize for causing trouble. We will fully cooperate with (the investigation).”
The searches came after another Japanese advertising agency, ADK Holdings Inc., reported to the Japan Fair Trade Commission that it had participated in bid rigging.
The prosecutors recently launched an investigation into the case, in addition to a scandal involving the alleged receipt by a former games organizing committee executive of 200 million yen in bribes from five companies, including ADK.
Dentsu was raided by the special investigation squad of the Tokyo prosecutors in July over the bribing scandal.
By reporting the alleged violation of the antitrust law and offering to cooperate with the watchdog, ADK is hoping for leniency in the form of a reduction in fines.