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The arrested chairman of Fukushima-based construction contractor Sato Kogyo Corp. has begun confessing his involvement in bid-rigging for a public sewage system project ordered by the Fukushima Prefectural Government, investigative sources have said.

Katsumi Sato, 67, arrested earlier this month by the Tokyo District Public Prosecutor’s Office, initially denied his mediator role in the bid rigging but reversed his earlier statement, saying, “I will admit to it because I don’t want to cause trouble to my employees,” the sources said.

Sato allegedly conspired with two accomplices, including Masao Tsuji, 59, president of an air conditioning equipment company who is a key supporter of Fukushima Gov. Eisaku Sato, to rig bids for the project to build a sewage system in areas upstream of the Abukuma River.

The suspects allegedly prearranged contractors’ bids to help a joint venture between Sato Kogyo and Tokyo-based contractor Tokyu Construction Co. win the contract, according to investigations. 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.

The team won the contract for 816.9 million yen, or 94.6 percent of the top limit set by the prefectural government.

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