The chairman of Fukushima-based construction contractor Sato Kogyo Corp. has denied involvement in rigging bids for a sewage system project ordered by the Fukushima Prefectural Government, investigative sources said Saturday.

Katsumi Sato, 66, said he has been arrested on false charges, according to the sources.

He was arrested by prosecutors Friday on suspicion of conspiring with two others to rig bids for the sewage system in the upper Abukuma River region.

The suspects prearranged contractors’ bids to help a joint venture between Sato Kogyo and Tokyo-based Tokyu Construction Co. win the contract, the prosecutors alleged. They are suspected of urging other bidding participants to offer higher prices than the Sato Kogyo-Tokyu Construction team in the bidding conducted in August 2004.

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