Mitsui & Co. employees arrested Wednesday on charges of interfering in the bidding process for a government-funded project pressured engineering firm JGC Corp. to cancel a tieup with Marubeni Corp., sources familiar with the case said Friday.

The Mitsui employees’ move to thwart the tieup was apparently made to monopolize the bidding process for a government-funded power project on Russian-held Kunashiri Island, in which Marubeni had shown interest.

According to the sources, Masahide Iino, 44, head of a Mitsui industry project team, and other employees of the trading house, demanded that JGC cancel the tieup with Marubeni, a rival trading firm, by threatening to cut JGC out of a project to dismantle decommissioned Russian nuclear submarines.

JGC and Mitsui jointly started dismantling the subs in fiscal 2000 with the cooperation of a French nuclear industry-related firm.

As the sub project was larger in scale than the project to build a diesel power plant on Kunashiri, JGC is believed to have given up on the tieup plan as requested to remain in the dismantling project, they added.

At that time, the employees also warned JGC that Lower House member Muneo Suzuki was “angry” over its attempts to join the bidding via a tieup with Marubeni, the sources said.

Suzuki, who was arrested last month in a separate bribery case, is known to have strongly pushed for the Kunashiri project. Prosecutors handling the Mitsui case are trying to determine if the disgraced lawmaker was involved, the sources said.

Following the cancellation of the tieup, Marubeni was unable to place a bid for the power project because a construction partner was a requirement under bidding guidelines.

Mitsui then asked two other trading houses, Sumitomo Corp. and Kanematsu Corp., to place mock bids, the sources said. Mitsui won the contract with a bid of 1.992 billion yen, or 99.9 percent of the government-set price of about 1.994 billion yen.

JGC declined to comment on the allegation.

Meanwhile, prosecutors on Friday raided several companies that Mitsui tied up with, including the Tokyo branch office of Daihatsu Diesel MFG Co., to search for evidence in the case.

The Tokyo District Public Prosecutor’s Office on Wednesday arrested Iino and two other Mitsui employees — Yusuke Shimazaki, 38, and Masayuki Takekoshi, 28 — on suspicion of obstructing the bidding process for the power project.

The prosecutors allege that the trading house illegally obtained the government’s budgeted price for the contract for diesel generators on Kunashiri and allegedly interfered in an aid committee’s operations.

The prosecutors also served fresh arrest warrants on two Foreign Ministry officials, Akira Maejima, 37, and Masaru Sato, 42, on suspicion of helping the trading firm win the contract via the rigged bidding process.

Both were arrested in May and later indicted on a charge of breach of trust.

Meanwhile, trade minister Takeo Hiranuma said Friday morning that Mitsui must take responsibility for the bid-rigging scandal and make sure such wrongdoing will never be repeated.

“It should never happen again at such a long-established general trading house. I would urge Mitsui to think over what it did,” Hiranuma, minister of economy, trade and industry, told reporters.

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