Employees of trading house Mitsui & Co. are being questioned on suspicion that they bribed a Mongolian government official last year to secure an order for a power project financed by the Japanese government, informed sources said Wednesday.

Employees of Tokyo-based Mitsui, including 39-year-old Yusuke Shimazaki, offered more than 1 million yen to a director general-level official overseeing electric power and energy management within Mongolia’s Infrastructure Ministry, the sources said.

Shimazaki has already been indicted on suspicion of manipulating bids for a project on Kunashiri, one of the disputed Russian-held islands off Hokkaido, that was funded via official development assistance.

The Tokyo Public Prosecutor’s Office is pursuing the Mongolian case, suspecting violations of a law that bans company employees from bribing foreign government officials, the sources said.

They added that both Mitsui and some of its employees will probably face criminal charges.

If the parties involved are charged, convicted and punished, it will be the first time punitive measures have been imposed since the Unfair Competition Prevention Law was revised in 1998 to include penalty clauses for bribing foreign government officials.

Individual offenders face prison terms of up to three years or fines of up to 3 million yen, while corporate bodies face fines of up to 300 million yen.

The law does not include penalties for foreign officials who accept bribes.

Shimazaki and other Mitsui employees involved in the case have reportedly admitted to Tokyo prosecutors during informal questioning that they bribed the official.

The bribe was aimed at securing an order to build 150 power generation facilities in 73 Mongolian villages, financed by ODA grants from Tokyo.

According to the sources, Mitsui employees are suspected of paying the Mongolian official on several occasions during his visit to Japan last summer, before bidding for the second-stage construction of the project.

In return, the employees are believed to have received information relating to the construction work, such as exchanges of notes between the Japanese and Mongolian governments, the sources said.

The projected cost of first-stage construction work stood at 1.03 billion yen, while that for second-stage construction came to 610 million yen.

The tenders were submitted in February 2001 and December, with Sumitomo Corp. and Kanematsu Corp. also offering bids.

Mitsui won the first-phase construction contract after submitting a quote equal to 99.88 percent of the projected price. It won the second-phase contract with a quote equal to 99.73 percent of the projected price.

Mitsui declined comment on the case on the grounds that any comments could affect the outcome of a separate bid-rigging trial involving its employees.

Shimazaki was one of three Mitsui employees arrested in July on suspicion of interfering in the bidding process for a power generation project on Kunashiri.

In the Kunashiri case, the employees allegedly obtained bidding information from Foreign Ministry officials to win the contract.

Lower House member Muneo Suzuki, who has been indicted on separate bribery charges, pressured the Foreign Ministry to go ahead with the Kunashiri project despite questions being raised about its necessity.

Prosecutors are believed to have obtained information about the Mongolian case as they investigated the Kunashiri scandal.

Mitsui’s stock price fell after reports of the allegations broke, tumbling 2.7 percent, or 18 yen, to close at 661 yen on the Tokyo Stock Exchange.

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