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

Japanese prosecutors on Tuesday indicted six companies including advertising giant Dentsu Group and seven individuals over the suspected rigging of bids worth US$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, Tokyu Agency and Fuji Creative Corp parent Fuji Media Holdings also issued similar statements of apology. Same Two declined to comment.

Cerespo, which local media said was denying being involved, said in a statement it would continue to explain its version of the events in court.

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.

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 collusion took place in 2018 and covered contracts estimated to be worth a total of 43.7 billion yen (US$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 a separate bribery case.