Tokyo Court upholds ¥300 million penalty for Dentsu over Olympic bid-rigging

Dentsu reels from a double punch as the Tokyo High Court upheld a ¥300 million (US$2.03 million) penalty over its Tokyo Olympics bid rigging, just weeks after Japan’s Fair Trade Commission (FTC) slapped the agency and its peers with a record ¥3.3 billion (US$22.3 million) fine for the same scandal.

The high court ruling upheld the two-year prison sentence, suspended for four years, for Koji Henmi, 57, former assistant head of Dentsu Inc.'s sports department. Judges found Henmi conspired with a former senior Tokyo Games official and others between February and July 2018 to preselect winners of lucrative contracts for Olympic test events and venue management.

The defence claimed that neither Dentsu nor Henmi intended to rig bids or seek unfair profits. But presiding judge Kazunori Karei, according to local media reports, found no fault with the lower court's judgment, pointing to credible testimony from a former senior committee official who said Dentsu was clearly told that landing the test event contracts would pave the way for winning the actual Olympic business.

Judge Karei also rejected the argument that the sentences were excessive, saying, "There is nothing unreasonable in the judgment, and it can't be considered unjust."

The decision comes within weeks of Japan’s Fair Trade Commission fining Dentsu and six other firms a total of ¥3.3 billion (US$22.8 million) for violations of the Antimonopoly Act related to the same scandal. Dentsu, while acknowledging “legal violations” and promising reforms, faces nearly ¥1 billion in surcharges, is contesting the FTC’s findings and has filed suit to overturn the administrative orders.

This Tokyo High Court ruling follows a similar defeat for rival Hakuhodo in May, when the court rejected the agency’s appeal and ordered it to pay a ¥200 million (US$1.35 million) fine. The court also upheld an 18-month suspended jail sentence for Kenichiro Yokomizo, 58, former president of a Hakuhodo affiliate, who was found to have colluded with a former senior Games official to fix contract winners for Olympic planning work.

So far, prosecutors have indicted six companies, including Dentsu Group and Hakuhodo, and six individuals, as well as the former Tokyo Games official, whose guilty verdict is now final. 

Campaign Asia-Pacific has reached out to Dentsu for comments, but did not hear back at the time of publication.