Photo/Illutration Investigators with the Tokyo District Public Prosecutors Office make their way to Dentsu Inc.’s main office in November to look into allegations of bid-rigging in connection with the Tokyo Olympics. (Asahi Shimbun file photo)

Officials at advertising behemoth Dentsu Inc. admitted they colluded to rig bids for Tokyo Olympic test events, investigative sources said.

Their admissions came during questioning on a voluntary basis by the Tokyo District Public Prosecutors Office.

Investigators have been looking into the allegations of bid-rigging since last year. They suspect the actions of the Dentsu employees and a former official with the Tokyo Olympic organizing committee violated the antitrust law as contracts were awarded in the absence of fair competition.

In 2018, the organizing committee outsourced a project to plan test events aimed at checking how to operate and manage potential problems with security setups prior to the Olympics.

Dentsu and eight other companies, as well as a consortium of businesses, won the 26 contracts totaling 540 million yen ($4.15 million) in what are supposed to be competitive bids.

Dentsu received five contracts worth 80 million yen, including the sites for soccer, baseball and softball test events.

According to the sources, the organizing committee official asked the Dentsu side to round up prospective winning bidders in 2017 before the tenders were held the following year.

The scheme was led by the official as well as two Dentsu employees, one of whom was seconded to the organizing committee. The other worked at the Dentsu side.

They compiled a list of potential bidders based on their interest in the project and business track records.

The list was updated when needed and shared by potential bidders.

Most of the 26 competitive bids saw only one company making a bid, almost identical to the list.

Although the Dentsu employees admitted to having created the list, they took issue with the assertion it was unlawful, maintaining that it was meant to ensure that at least a single company would join each of the tenders.

But they had a change of heart recently and admitted their actions amounted to bid rigging that deterred competitors from joining in the tender, the sources said.

The organizing committee official still denies that the arrangement amounted to bid-rigging, according to the sources.

A special investigative squad at the prosecutors office and the Fair Trade Commission searched the official’s home and the main Dentsu office in November.

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