Prosecutors are considering arresting senior officials of major water-treatment plant makers over their alleged role in rigging bids for local government contracts, according to sources.
The special investigation squad of the Osaka District Public Prosecutor's Office is considering arresting the officials in violation of an Antimonopoly Law clause that prohibits unfair business transactions.
Earlier this month the prosecutors searched the offices of about 10 companies that make water-treatment plants.
The Fair Trade Commission also raided their offices.
Among the firms searched were Ebara Corp., Kurita Water Industries Ltd. and Kubota Corp.
Arrests in the case would be the first application of a revision to the Antimonopoly Law that came into force in January.
The revision enables regional prosecutors to investigate antimonopoly cases. Until January, only the Tokyo High Public Prosecutor's Office had this power.
The FTC is expected to file criminal complaints with prosecutors against the companies in connection with alleged bid-rigging on five projects, the sources said.
These include one ordered by the city of Hannan, Osaka Prefecture, a tender for which was issued in February 2005.
Ebara's Osaka branch won the public tender with a bid of 2.04 billion yen, which was 94.8 percent of the top price set by Hannan.
According to an investigation, 11 plant-engineering companies had planned to take part in bidding for the project, but three, including Mitsubishi Heavy Industries Ltd., withdrew.
The prosecutors suspect the companies repeatedly rigged bids for local government contracts for years.
The companies are suspected of conspiring to select winners and fix bid prices water-treatment plants for local governments.