Dentsu hit with double trouble over Tokyo olympics bid-rigging scandal
Dentsu faces major legal setbacks over Tokyo Olympics bid-rigging, with a ¥300 million court fine and suspended jail sentence, following a separate ¥3.3 billion antitrust penalty by Japan’s FTC.
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Dentsu is facing major legal trouble over its role in fixing bids for the Tokyo 2020 Olympics in Japan. As per the media reports, the Tokyo High Court in a recent ruling ordered the company to pay a fine of ¥300 million (US$2.03 million).
The court also upheld a suspended two-year prison sentence for Koji Henmi, a former top executive in Dentsu’s sports department.
Henmi was found guilty of working with a senior official from the Tokyo Games and others in 2018 to help certain companies win contracts unfairly. These contracts were for test events and venue operations ahead of the Olympics. The court said Dentsu was clearly told that winning these test event deals would lead to more Olympic business later.
Just weeks before this court ruling, Japan’s Fair Trade Commission (FTC) had already fined Dentsu and six other companies a total of ¥3.3 billion (US$22.8 million) for the same scandal.
Dentsu’s share of that fine is nearly ¥1 billion, and the company is now fighting the FTC’s decision in court, even though it has admitted to some legal violations and promised reforms.
This is not the first time a major ad agency has lost an appeal. In May, Hakuhodo, Dentsu’s biggest rival, was also fined ¥200 million (US$1.35 million). Its former executive was given an 18-month suspended jail sentence for similar bid-rigging activities.
So far, six companies and six individuals, along with the former Tokyo Games official, have been charged in connection with the case.
