Plant engineering firm Ebara Corp. allegedly netted 300 million yen in taxpayers' funds by having a subcontractor pad bills tied to a garbage incinerator construction project in Chiba Prefecture in 2001, sources said Friday.
Tokyo-based Ebara won a contract to build a recycling and garbage incinerator for the Nagareyama Municipal Government in July 2001, having submitted a bid of 11 billion yen.
It then named Sato Kogyo Co., a Tokyo-based general contractor, as a subcontractor designated to build the facility.
Sato Kogyo apparently padded its bills by some 300 million yen, sending the money as kickbacks to Ebara, the sources said.
Sato Kogyo logged the funds as unaccounted for when the case was reported to the tax authorities. Funds under this classification are normally subject to heavy taxation.
Sato Kogyo has been undergoing rehabilitation since it sought court protection from creditors in March 2002.
The city government placed an order for the incinerator in July 2001. It picked seven firms, including Ebara, to bid on the project but later barred five of the seven, citing the fact that they had been warned by the Fair Trade Commission over their bid-rigging practices.
Following the city's action, a rightwing group staged a campaign in Nagareyama, stating that one of the remaining two firms also had a history of warnings over bid-rigging.
The city eventually opened the bid to four firms.