Dentsu and Hakuhodo could face criminal charges in Tokyo Olympics bid-rigging scandal

According to media reports, The Tokyo District Public Prosecutor’s Office and the Fair Trade Commission are examining the cases against the two ad giants, along with Tokyu Agency, and three event companies Cerespo, Fuji Creative and Same Two, to consider laying charges.

Ad agency ADK, Japan's third-largest ad agency, is expected to escape prosecution after voluntarily reporting its activities.

Earlier this week four people were arrested on suspicion of violating Japan's Antimonopoly Law. Former Dentsu sports department assistant chief Koji Henmi, former Tokyo Games organizing committee executive Yasuo Mori along with Yoshiji Kamata and Masahiko Fujino from event production companies Cerespo and Fuji Creative were detained by the special investigation squad of the Tokyo District Public Prosecutors Office.

Japanese officials have been investigating the agencies' involvement in a pre-determined bidding system which was pre-determined

The Japan News, reports that prosecutors believe the investigation has exposed an "industry-wide bid-rigging" system, which, it claims, is the result of the "dominance of a single company,”. It reports a quote from a senior prosecutor: “We will pursue Dentsu’s responsibility as a corporation.”

Prosecutors believe Tokyo's Olympic and Paralympic Organising Committee's colluded with Dentsu to create a predetermined bidding system, which enabled agencies to select the event contracts they wished to win, and ensured they were then the sole bidders for those events.

The bid-rigging scandal was exposed after the arrest of Haruyuki Takahashi, a former executive board member of the organising committee, and ex-Dentsu executive, who was arrested on charges of accepting bribes in a broader corruption scandal.

The investigation by Tokyo District Public Prosecutors Office and the Japan Fair Trade Commission raided the offices of Japan's three largest advertising agencies and threatens to tarnish the reputations of the industry.

All three agencies told The Drum they were cooperating with authorities, and all are understood to have admitted to the activities.