Major Japanese advertising agency ADK Holdings Inc. has reported to the fair trade watchdog that it participated in bid rigging for the rights to organize test events for the Tokyo Olympics, a source close to the matter said Tuesday.
ADK came forward after Tokyo prosecutors recently launched an investigation into bid-rigging allegations in connection with the test events, in addition to a scandal involving the alleged receipt by a former games organizing committee executive of nearly 200 million yen ($1.41 million) in bribes from five companies, including ADK.
By reporting the alleged violation of the antitrust law and offering to cooperate with the Japan Fair Trade Commission, ADK is hoping for leniency, such as the avoidance of criminal charges and a reduction in fines.
ADK President Toshiya Oyama told reporters on Tuesday he was not ready to comment on the allegation.
In 2018, ADK contracted to organize three of the 26 test events at planned venues for the Tokyo Games, according to the source. The three contracts amounted to slightly over 100 million yen.
The test events were held to identify administrative, security and other issues ahead of the Tokyo Olympics and Paralympics, which took place last summer after a one-year postponement due to the coronavirus pandemic.
The contracts for the events, carried out between 2018 and 2021, were awarded to ADK, Japan's biggest advertising agency Dentsu Group Inc., seven other companies and one consortium, other sources have said.
The contracts ranged from roughly 4 million yen to around 60 million yen and totaled about 500 million yen.
ADK contracted to organize test events at Makuhari Messe convention center for 28.90 million yen, at Baji Koen and Sea Forest Cross-Country Course for around 29.16 million yen and at Ariake Gymnastics Center for 45.79 million yen.
According to the organizing committee, which is in the process of liquidation, the nine companies and one consortium that bid successfully were also awarded contracts without a tender process to run the competition venues during the Tokyo Games.
The contracts for the test events and running the venues may have amounted to tens of billions of yen, the source said.
In the bribery scandal, Haruyuki Takahashi, a former member of the organizing committee, faces four indictments for receiving bribes from companies in return for helping them to become sponsors or advertising agents for the global sports event.
ADK's former President Shinichi Ueno and other former employees were also indicted on charges of bribery.
If convicted, individuals involved in the alleged collusion for the test event contracts could face imprisonment of up to five years or fines of up to 5 million yen. Corporations could face fines of up to 500 million yen.