Dentsu admits to bid-rigging in Tokyo Olympics; charges for other arrests made

Japanese media reports say several staffers from ad giant Dentsu Inc Japan have admitted to bribery charges and participation in bid-rigging the Tokyo Olympics and Paralympics test events during voluntary questioning with the Tokyo District Public Prosecutors’ Office. Dentsu employees reportedly also said that they were not aware of the illegality linked with bid-rigging.

Last week, former executives of apparel firm Aoki Holdings, Hironori Aoki, his brother Takahisa Aoki, and Katsuhisa Ueda, were also charged with giving 28 million yen (US$215,000) in bribes to former Tokyo Olympics Committee member and ex-Denstu executive Haruyuki Takahashi. Prosecutors are seeking a 30-month prison sentence for Hironori Aoki, an 18-month sentence for Takahisa Aoki, and a one-year sentence for Ueda. The ruling will take place on April 21.

In addition, local English daily, The Mainichi reports that prosecutors are building a case against an unnamed former deputy manager of Tokyo 2020 organising committee and employees of multiple companies including Dentsu, on grounds of bid-rigging.

However, in a statement released to Campaign Asia-Pacific, Dentsu Inc. Japan denies any arrest allegation of its employees following media reports of admissions of guilt.   

“The reports currently hitting press were not released by Dentsu Inc., Tokyo. There is no factual basis for claims any employees have been arrested. Dentsu Inc. will continue to fully cooperate with the authorities in their investigation.”

Prosecutors believe bid-rigging contravenes Japan's antimonopoly law, the punishment for which is fines and imprisonment.

The news follows several months of investigation and raids in Japan’s leading advertising agencies which culminated in rival Hakuhodo and earlier ADK purportedly confessing to their role in the infringement. 

As Japan's most powerful agency network, Dentsu dominates the advertising, marketing and communications ecosystem in the country and helped to land the 2020 Games for Tokyo. Haruyuki Takahashi, a former executive at Dentsu, has been arrested four times in recent months on charges of receiving bribes from various stakeholders and sponsors for the Games.

At this point, prosecutors suspect rigging took place in the 26 open bids out of the total 56 test events planned in 2018. These events were eventually handed out to nine companies, including Dentsu and Cerespo, as well as a consortium without a tender process.

The money that exchanged hands for the alleged fixing is estimated at 500 million yen (US$3.6 million) but with the involvement of a growing number of companies coming to the forefront, speculation is rife that the contracts could have been much bigger, possibly worth tens of billions of yen and more arrests will follow as the investigation deepens.