Three leading oil firms pleaded not guilty while eight others admitted to charges of violating the Antimonopoly Law by rigging bids on fuel-supply contracts with the Defense Agency in 1998.
Those who denied the charges were Cosmo Oil Co., Nippon Mitsubishi Oil Corp., and Showa Shell Sekiyu K.K., and their employees who were in charge of the bidding process at the time.
Japan Energy Corp., Idemitsu Kosan Co., Fuso Sekiyu K.K., General Sekiyu K.K. and their officials, as well as Kygnus Sekiyu K.K., Kyushu Oil Co., Taiyo Oil Co., Taiho Industries Co. pleaded guilty to the charges.
On Friday, Cosmo Oil, Nippon Mitsubishi and Showa Shell told the Tokyo High Court that bid rigging was virtually a "ceremony," and that their bid price was in fact determined by the Defense Agency's Central Procurement Office.
The three firms claimed that the wholesalers met just to decide who would supply the products and see that the products reached the agency. The practice had continued for over 10 years, they added, and they merely followed the rules that already existed.
Prosecutors said the officials rigged the bidding to allow oil distributors to win fuel-supply contracts worth a total of nearly 30 billion yen in accordance with their share of Defense Agency contracts in 1997.
The oil firms held clandestine consultations prior to bidding sessions so that certain oil distributors could land contracts with the agency at certain prices, they said.
Contracts were signed by the agency's Central Procurement Office on four occasions from April to September in 1998 for fuel for jet fighters, ships and land vehicles.
The firms made sure that all the companies involved bid higher than the expected price listed by the agency, so that the agency would raise its price and hold the bidding session again, they said.