Japan accuses Ad Giant Dentsu of rigging bids for the Tokyo Olympics

Japanese advertising giant Dentsu was one of the driving forces behind the Tokyo 2020 Olympics, helping to bring in record sales of $3.6 billion and orchestrating everything down to the last detail.

On Tuesday, Japanese prosecutors accused the company of breaking the law in the process, alleging that it conspired with five others to evade the public bidding process leading up to the Games.

The charges come as part of a widening investigation into corruption surrounding the 2020 Olympics, which have been postponed until 2021 due to the pandemic.

Japanese prosecutors have cast a wide net, accusing executives from some major Japanese corporations of bribery as they competed for high-profile sponsorship deals and sought contracts to, among other things, manufacture Olympic uniforms and publish printed materials for the Games.

The latest charges relate to bid-rigging, with prosecutors asserting that employees of Dentsu and other companies — including Japan’s second-largest advertising firm, Hakuhodo — violated the country’s antitrust law by circumventing the public bidding process for testing events before the Games. The events were primarily costume rehearsals designed to help the organizers assess their readiness to host the main event.

Rather than engage in open competition for contracts, prosecutors said in the indictment, the companies colluded to select a single company to bid. In doing so, the plaintiffs added, they “significantly limited competition”.

Earlier on Tuesday, the Japan Fair Trade Commission filed a complaint against the companies and seven individuals, including Yasuo Mori, a former executive director at the Olympics Organizing Committee. Earlier this month, prosecutors arrested Mr Morey and three of his co-defendants on Tuesday.

Dentsu is widely considered one of the most influential corporations in Japan, working closely with the country’s most powerful corporations as well as its ruling political party. She is also a powerful figure in the world of international sports promotion, playing a crucial role in putting together the Tokyo Olympics, an event from which she benefited greatly.

In a statement on its website on Tuesday, Dentsu said it “takes this situation very seriously and offers its sincere apologies to its business partners, shareholders, and all other relevant parties for any inconvenience or concern this may cause.” It said it had set up a committee to investigate the company’s conduct and asked some senior executives to return part of their compensation.

Even before the start of the Tokyo Olympics, there were concerns about wrongdoing. In 2016, French authorities said they had uncovered multimillion-dollar payments made by the Tokyo Olympics organizing committee to a Singaporean company in a bid to secure the winning bid to host the Games. The scandal led to the resignation of the head of the National Olympic Committee, Tsunekazu Takeda. Mr. Takeda denied any wrongdoing.

In the years that followed, additional corruption allegations tarnished the reputation of some of Japan’s most prominent companies.

In August, prosecutors arrested top executives from publishing giant Kadokawa and clothing retailer Aoki Holdings on bribery charges. Also arrested was former Dentsu CEO Haruyuki Takahashi, who served on the executive board of the committee charged with organizing the Tokyo Games. He has denied the charges against him.

In December, the founder of Aoki Holdings, Hironori Aoki, Admission of guilt To donate about $205,000 to Mr. Takahashi. In court appearances this month, the former head of the Japanese marketing company ADK I confess to pay more than $100,000 to Mr. Takahashi as his company sought marketing opportunities related to the games.

Responding to reporters’ questions about Tuesday’s accusations, the Japanese government’s chief spokesperson, Hirokazu Matsuno, said they showed “contempt for the value of sport.”