Dentsu admits part in Tokyo Olympic bid-rigging scandal

Dentsu joins Hakuhodo and ADK, with all three of Japan’s top advertising agencies embroiled in the scandal.

According to media reports, Dentsu admitted to collusion but the officials from Japan’s largest advertising network maintain they did not believe the activity was illegal at first, according to media reports.

Tokyo District Public Prosecutors Office has been investigating allegations Haruyuki Takahashi, a former Tokyo Olympics and Paralympics organising committee executive and former senior managing director at Dentsu Inc, received ¥200m ($1.4m) in bribes from advertising agencies.

The police allege Takahashi colluded with agencies by ensuring they were the sole bidders for contracts to host test events at planned Tokyo Games venues. The test events were conducted to safeguard event facilities and identify any issues ahead of the Olympics.

The investigation involved 26 open bids for the rights to plan 56 test events with the contracts totalling more than ¥500 m, which the police allege were rigged.

Japan’s three top advertising agencies were embroiled in the scandal along with ad firm Tokyu Agency and three event production companies Cerespo, Same Two and Fuji Creative.

Prosecutors believe the bid-rigging constitutes a violation of Japan's antimonopoly law. The penalties if found guilty include fines and imprisonment. Tokyo District Public Prosecutors Office has been working with the Japan Fair Trade Commission on the investigation.

Dentsu, Hakukoho and ADK are all believed to have admitted wrongdoing.

ADK has implemented a new management structure and launched an independent investigation committee consisting of external board members and outside legal counsel. Three former ADK staff members were arrested for suspicion of involvement in bribery.