Prosecutors on Monday arrested an executive at Japan Highway Public Corp. and indicted his former colleague and officials from four companies, stepping up their probe into one of the country’s largest public works bid-rigging scandals.
The Tokyo District Prosecutor’s Office arrested Tsuneo Kaneko, a 57-year-old executive board member of Japan Highway, in connection with the alleged bid-rigging for bridge projects ordered by the highway body in violation of the Antimonopoly Law, prosecutors said in a statement.
Kaneko is the second current executive of Japan Highway to be arrested, following the arrest of its vice president, Michio Uchida, on July 25.
Earlier Monday, Tokyo prosecutors indicted Shozo Kanda, a 70-year-old former Japan Highway board member, in the same scandal. They also charged four executives from construction giants Mitsubishi Heavy Industries Ltd., Ishikawajima-Harima Heavy Industries Co., Yokogawa Bridge Corp. and Kawada Industries Inc.
The companies were also indicted for bid-rigging along with two other firms, JFE Engineering Corp. and Miyaji Iron Works Co.
Prosecutors arrested Kanda and the four company officials and raided their offices in mid-July over the scandal, after charges were filed against 26 companies and eight executives for allegedly colluding to divvy up 180 contracts worth a total of 71 billion yen in fiscal 2003 and 2004.
Kanda, who landed an advisory position at Yokogawa Bridge after retiring from the government-run highway body, allegedly acted as a bid-rigging coordinator in highway projects, prosecutors said.
His former colleagues Kaneko and Uchida granted projects to the companies per Kanda’s arrangement, thus causing the highway agency to pay an additional 50 million yen for the contracts, prosecutors said.
The companies allegedly set up a system of predetermining prices and winners among 49 companies, before bidding began for steel bridge construction contracts offered by the Land, Infrastructure and Transport Ministry. The five men allegedly met over dinner and picked winners based on Kanda’s suggestions, prosecutors said.
The bid-rigging system may have existed since the 1960s and determined the outcome of an estimated 350 billion yen worth of contracts a year, according to media reports.
The case has become one of Japan’s biggest-ever bid scandals, and has also fixed attention on the deep ties between public servants and the industries they oversee. Retired bureaucrats often take jobs at companies they once regulated in a phenomenon known as “amakudari.”
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