Japanese advertising agency Dentsu fined over Tokyo Olympics bid-rigging

Global marketing and advertising agency Dentsu has been fined 300 million yen (US$1.94 million) after admitting to rigging bid contracts for test events ahead of the Olympic Games in Tokyo while former Dentsu executive, Koji Henmi, has been handed a two-year prison sentence, suspended for four years, for his role in the awarding of contracts.

Japanese news agency Kyodo reported that Dentsu admitted to “rigging bids” for test event contracts worth more than 500 million yen (US$3.2 million), although it denied colluding with others to restrict around 43.1 billion yen (US$280,000) worth of contracts related to Games operations.

The Tokyo District Court heard that companies which were awarded test event contracts were told they were likely to be awarded contracts for the Games themselves, with Presiding Judge Kenji Yasunaga noting that the Tokyo-based Dentsu was aware of this.

Henmi’s sentence was suspended after the court ruled that he did not act for personal gain, and that there was no evidence that the information was exchanged in a way that enabled the firms to secure assignments.

Henmi was arrested in February 2023 alongside Yasuo Mori, a former official on the Tokyo 2020 organising committee. The pair were alleged to have conspired with one another to award the test event contracts. Mori received a suspended two-year sentence in December 2023.

During the trial, Dentsu acknowledged its involvement in bid-rigging for the initial test event planning projects. However, it denied any role in the organisers' decision to award the remaining projects to the same contractors as the initial ones.

Prosecutors alleged that the organisers secretly agreed with Dentsu and others to automatically grant the remaining projects to them.

The focus of the trial has been on these latter projects, which represented 99% of the total value of all the relevant contracts.

In February 2023, a former organizer, six companies including Dentsu, and six officials from these companies were indicted.

Among the six companies, Hakuhodo Inc., Japan’s second-largest advertising agency next to Dentsu, and event production company Cerespo Co. also received guilty verdicts. Both have appealed the rulings.

Both Dentsu and Henmi have appealed against the rulings made by the Tokyo District Court.

Image: Tokyo's Japan National Stadium during the 2020 Olympics.