Seven senior officials from seven major engineering companies were arrested Tuesday over their alleged involvement in fixing bids for sewage and sludge plant projects financed by local governments, investigative sources said.
The executives, including Kenichi Terakawa, 59, Kubota Corp.’s sales chief in its recycling plant section, have been arrested by the Osaka District Public Prosecutor’s Office on suspicion of breaking the Antimonopoly Law.
The seven have owned up to the charge, investigative sources said.
The officials were questioned earlier in the day after the Fair Trade Commission and Prosecutor General Kunihiro Matsuo filed a criminal complaint against 11 engineering companies. The firms are suspected of rigging bids for eight sewage and sludge disposal plant projects between February and July 2005 collectively worth about 23 billion yen.
Arrested along with Kubota’s Terakawa were: Shiro Umeda of Ataka Construction & Engineering Co.; Tadayoshi Tsuji of Kurita Water Industries Ltd.; Masanori Hasegawa of Ebara Corp.; Shinichi Usuda of JFE Engineering Corp.; Kunio Tanno of Nishihara Environment Technology Inc.; and Fumitake Nakamura of Hitachi Zosen Corp.
In addition to the seven firms, Sumitomo Heavy Industries Ltd., Mitsui Engineering and Shipbuilding Co., Mitsubishi Heavy Industries Ltd. and Takuma Co. are under investigation.
Sources said investigators plan to continue questioning people from the four firms.
Investigations show that the five picked the successful bidder for each project according to an agreement reached by the participants.
They also made adjustments based on the participants’ wishes, the sources said.
The firms are alleged to have prearranged the winning and losing bids for eight projects in Osaka, Shizuoka, Mie, Yamaguchi, Fukuoka, Nagasaki and Kumamoto prefectures, the sources said.
According to data disclosed by the local governments, the winning bids for seven of the eight contracts all came within 10 percent of the maximum allowable bid.
For example, the closest bid submitted for a project was one in Fukuoka Prefecture that cost 2.44 billion yen, or 98.2 percent of the contract’s upper limit.
The lowest winning bid submitted was for a project in Yamaguchi Prefecture that came in at 2.68 billion yen, or 91.2 percent of the contract’s limit.
The 11 companies were searched by the FTC and prosecutors on April 25 and 26 on suspicion of Antimonopoly Law violations, but it was the Osaka District Public Prosecutor’s Office’s invocation of the revised Antimonopoly Law that got the ball rolling on the case.
The revision, which took effect in January, allows district-level prosecutors to investigate antimonopoly cases.
Prior to the revision, only the Tokyo High Public Prosecutor’s Office could open antimonopoly probes.