Dentsu and Hakuhodo indicted on criminal charges for bid-rigging scandal
Japan’s two largest advertising agencies will face criminal charges for the companies’ roles in the suspected bid-rigging activity for events at the Tokyo Olympics and Paralympic Games.
Japan's two largest advertising agencies are among six firms facing criminal charges over suspected collusion
Dentsu, Hakuhodo, along with Tokyu Agency, Fuji Creative Corporation, Cerespo and Same Two, in addition to six individuals, will face charges for the alleged violation of the Antimonopoly Act.
The agencies are suspected of collusion in connection to the bidding process for contracts to host test events for the Games venues, the contracts are estimated to have been worth $320 million.
The indictments follow months of investigations by Tokyo District Public Prosecutor's Office and the Japan Fair Trade Commission which included raids on the agencies and the arrests and indictments of a number of former employees of the companies including Dentsu and ADK.
FTC investigator Go Okumura told media this week, "We determined that this is a malicious and serious case that will have a broad impact on people's lives.”
A Dentsu statement 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.”
The statement also said the company had taken disciplinary action against the officers in charge of the business at the time of the alleged collusion.
“The Company takes its responsibility for this matter seriously and has requested that the two Group Executive Management members currently in charge of the Japan region return their compensation. The two individuals have expressed their willingness to accept the request.
It continued: “Strict action will be taken based on the results of the upcoming investigation by the Investigation and Review Committee of Outside Experts and trial.”
A statement from Hakuhodo said “Hakuhodo DY holdings Inc. deeply apologizes to our shareholders, business partners, and all other stakeholders for any inconvenience and concern this situation may have caused. We also take this situation very seriously. The entire Hakuhodo DY group is committed to thorough compliance and to regaining the trust of society.”
Earlier this week, Dentsu Group's president & CEO Hiroshi Igarashi reportedly admitted the agency's involvement in rigging bids for the Tokyo Games.