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The Olympic rings are seen in Tokyo ahead of the 2021 Games. Image: AP file
crime

Ad giant Dentsu fined ¥300 mil over Tokyo Olympics bid-rigging

18 Comments

A Tokyo court on Thursday fined major advertising firm Dentsu Group Inc 300 million yen, the amount sought by prosecutors, for its role in bid-rigging related to the 2021 Tokyo Olympics and Paralympics.

The Tokyo District Court also sentenced former Dentsu executive Koji Hemmi to two years in prison, suspended for four years, for rigging bids on contracts to plan test events and operate venues for the 2021 Summer Games. Prosecutors had sought a two-year prison term.

Dentsu became the third company convicted among six indicted over alleged bid-rigging related to the global sporting event. Both the company and Hemmi have appealed the rulings.

In the trial, Dentsu admitted to rigging bids for contracts worth over 500 million yen to plan and run pre-games test events but denied colluding with others to restrict transactions for about 43.1 billion yen in contracts related to the games' operations.

Prosecutors argued that planning the test events and managing the Games were effectively the same operations, which restricted competition. Their case was based on previous testimonies, including that of a former operating executive on the Tokyo Olympics organizing committee, whose guilty verdict for bid-rigging has been finalized.

Citing testimony, Presiding Judge Kenji Yasunaga said companies running the test events were told they would likely be commissioned to manage the Games and that Dentsu was aware of this.

Dentsu restricted competition by indicating in meetings that bids were more likely to be accepted if firms submitted tenders in line with the former operating executive's wishes, Yasunaga said.

Hemmi received a suspended sentence as there was no evidence that information was exchanged in a way that allowed companies to secure assignments, and the court found he had not acted for personal gain.

Dentsu said in a press release, "The decision differs significantly from our claims. We will reassert our justifications in the appeal and request that the ruling be rectified."

Besides Dentsu, advertising agencies Hakuhodo Inc and Tokyu Agency Inc, along with event production companies Cerespo Co, Fuji Creative Corp, and Same Two Inc, were indicted on suspicion of colluding in bid-rigging with the former deputy director between February and July 2018.

Last year, the court fined Hakuhodo 200 million yen and Cerespo 280 million yen. Both firms have appealed the rulings.

© KYODO

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18 Comments
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I'm sorry, but 300 million is a rounding error for a company the size of Dentsu. It should have been 10 times more. Also, the suspended sentence for 4 years is also too light a sentence. But this is Japan and corporate crime pays, with little or no punishment.

9 ( +23 / -14 )

Slap on the wrist

18 ( +22 / -4 )

No jail time?!

14 ( +17 / -3 )

Scandal at Dentsu… again.

9 ( +16 / -7 )

All the hype from the priciest Olympics ever held, now everyone got the bill.

https://www.wsj.com/articles/the-tokyo-olympics-staggering-price-tag-and-where-it-stands-in-history-11627049612

https://www.asahi.com/ajw/articles/photo/33239738

-12 ( +5 / -17 )

Bid-rigging is normal practice in Japan. I see it all the time in my job.

-8 ( +12 / -20 )

In the trial, Dentsu admitted to rigging bids for contracts worth over 500 million yen to plan and run pre-games test events …

¥200 million = 500 million in contracts - 300 million in fines

Dentsu netted ¥200 million. Is that a deterrent?

17 ( +18 / -1 )

Just the cost of doing business to this slimeball company. Disgustingly poor punishment.

9 ( +14 / -5 )

Laughable. The government handed them truck loads of money during covid, no-strings attached.

1 ( +8 / -7 )

""The Tokyo District Court also sentenced former Dentsu executive Koji Hemmi to two years in prison""

WELL DONE YOUR HONOR.

Congratulations Japan, corruption is the only force that can destroy Democracy.

-1 ( +6 / -7 )

Well Done Prosecutors.

-6 ( +2 / -8 )

Sham punishment…..as usual everyone is in bed with each other

7 ( +8 / -1 )

Nice bunch of guys. Also known for driving a young employee to suicide through overwork.

Still, as someone mentioned, 300 million is pocket change, and I expect we'll see the usual press conference with the fake contrition, after which it's back to business.

6 ( +6 / -0 )

300 millions is a water drop for dentsu and as said above, there is still profit. It seems prosecutor can not make a basic substraction....

5 ( +5 / -0 )

Asiaman7Today  07:41 am JST

In the trial, Dentsu admitted to rigging bids for contracts worth over 500 million yen to plan and run pre-games test events …

¥200 million = 500 million in contracts - 300 million in fines 

Dentsu netted ¥200 million. Is that a deterrent?

Total contracts sum up to 43.5 billions.

All contracts over 500m were subject to bid rigging so if the 300m fine was applied to each of those contracts, it would be a deterrent but that is not the case

2 ( +2 / -0 )

Congratulations Japan, corruption is the only force that can destroy Democracy.

Yep, decisions like this confirm this country is a plutocracy, and the government works for them - not the population.

-2 ( +5 / -7 )

What happens to the $300,000,000? Who gets that?

6 ( +6 / -0 )

Dentsu still gained more than what they're fined...

2 ( +2 / -0 )

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