Japan Accuses Ad Giant Dentsu of Rigging Bids for Tokyo Olympics
Prosecutors claimed that the company and five other people conspired to evade public bidding for test events. This is part of an extensive investigation into corruption surrounding the Games.
Dentsu, a Japanese advertising giant, was one of the key drivers behind the Tokyo Olympics 2020. It helped to bring in record-breaking $3.6 billion in sponsorships while also coordinating every detail down to the last detail.
Japan's prosecutors charged the company with violating the law on Tuesday. They claimed it and five other companies conspired to evade public bidding processes leading up to the Games.
These accusations are part a wider investigation into corruption surrounding 2020 Olympics. They were delayed to 2021 due to the pandemic.
Japanese prosecutors have widened their net and charged executives of some of Japan's most prominent companies with bribery in their bid for sponsorship deals. They also sought contracts to manufacture Olympic uniforms and publish printed materials for the Games.
Prosecutors have brought charges against Dentsu and others for bid rigging. They claim that employees of Dentsu, Hakuhodo, and other companies, infringed Japan's antimonopoly laws by avoiding the public bidding process to test events before the Games. These events were basically dress rehearsals that organizers used to assess their readiness to host the main event.
The prosecutors stated that the companies conspired to pick one firm to bid rather than engaging in open competition for contracts. Prosecutors added that they had "substantially limited competition" by doing this.
Japan's Fair Trade Commission had filed a complaint against seven individuals and the companies earlier on Tuesday. Three of the three people being charged were also arrested by prosecutors earlier this month.
Dentsu, which works closely with Japan's top companies and its ruling party, is widely considered to be one of Japan's most influential businesses. It is also a prominent figure in international sports promotion. Dentsu played a crucial role in putting on the Tokyo Olympic Games. This event was a huge success for the company.
Dentsu posted a statement Tuesday on its website saying that it takes the situation seriously and apologizes to shareholders, business partners and other parties for any inconveniences or concerns. It also stated that it has established a committee to investigate company conduct and asked senior executives to return a portion of their compensation.
Concerns about wrongdoing were raised even before the Tokyo Olympics started. French authorities claimed that they found millions of dollars worth of payments by Tokyo's Olympic organizing board to a Singaporean company in order to secure the bid to host the Games. Tsunekazu Takeda was forced to resign as head of the National Olympic Committee. Takeda denied any wrongdoing.
Over the years, more corruption accusations have been levelled against some of Japan's most prestigious companies.
Prosecutors arrested two top executives of Kadokawa Publishing and Aoki Holdings, both for bribery. Haruyuki Tahashi, a former executive at Dentsu, was also taken into custody. He served on the executive committee that organized the Tokyo Games. He denied all charges.
Hironori Aoki (founder of Aoki Holdings) pleaded guilty in December to paying around $205,000 to Mr. Takahashi. This month, the former president of Japanese marketing company ADK confessed to having paid Mr. Takahashi more than $100,000 in order to market his company's involvement with the Games.
Hirokazu Mattsuno, Japan's top government spokesperson, responded to reporters' questions on Tuesday's charges. He said that they had shown "contempt for sports values".