The president of Dentsu Group Inc. has admitted to prosecutors the Japanese ad giant's involvement in rigging bids over the Tokyo Olympics, sources close to the matter said Monday, as a corruption scandal engulfing the global sports event widened.
Dentsu Group President and CEO Hiroshi Igarashi admitted to prosecutors in voluntary questioning Friday his company was responsible for rigging bids over contracts to plan and run pre-games test events and operate competitions during the Summer Games in 2021, the sources said.
Tokyo prosecutors are considering indicting Dentsu and five other companies on charges of violating the anti-monopoly law as early as Tuesday after receiving complaints by the Japan Fair Trade Commission.
In the scandal, prosecutors have already arrested Koji Hemmi, a former Dentsu executive, Yasuo Mori, former operations executive at the Tokyo Olympics organizing committee, and two senior officials from two companies that won contracts in planning test events.
Multiple people related to Dentsu, including Hemmi, have admitted to the bid-rigging allegations, the sources said.
The five companies are Japan's No. 2 ad agency Hakuhodo Inc., ad firm Tokyu Agency Inc., and event production companies Cerespo Co., Fuji Creative Corp. and Same Two Inc.
Prosecutors allege the officials of the five companies collaborated with Hemmi and Mori to rig bids. Cerespo, however, has denied involvement, the sources said.
It is suspected the rigging took place in connection with 26 open bids held in 2018 for the rights to plan test events. These were awarded to nine companies, including Dentsu and Hakuhodo, as well as a consortium for a total of 538 million yen ($3.95 million).
Prosecutors also suspect that the companies then reached agreements to secure contracts to run the pre-game events and competitions at the Tokyo Olympics and Paralympics, with the contracted amount totaling around 40 billion yen, investigative sources said.
Officials Yoshiji Kamata from Cerespo and Masahiko Fujino from Fuji Creative have also been arrested, while officials of Tokyu Agency and Same Two are being investigated.
The bid-rigging case is the latest corruption scandal to emerge in relation to the global sports event following revelations of bribery.
Haruyuki Takahashi, former executive at the organizing committee and former senior managing director at Dentsu, has been indicted four times on charges of receiving bribes totaling some 198 million yen in return for helping companies be selected as a sponsor or a marketing agent of the global event.