Taisei and Kajima hit by arrests over maglev bid-rigging scandal


Prosecutors on Friday arrested officials from two of the four major contractors suspected of having rigged a bid involving the Tokyo-Osaka maglev project.

Arrested by Tokyo prosecutors were former Taisei Corp. Managing Director Takashi Okawa, 67, and Kajima Corp. division manager Ichiro Osawa, 60. Both are suspected of breaching antitrust regulations.

Between 2014 and 2015, the two allegedly discussed bidding prices with officials of rivals Obayashi Corp. and Shimizu Corp. and conspired to determine which would win before Central Japan Railway Co. (JR Tokai) issued the tenders.

According to JR Tokai, two joint ventures led by Shimizu and Obayashi won orders to perform infrastructure work for magnetically levitated trains at Shinagawa Station in 2015, while a venture led by Obayashi won a contract for a Nagoya Station project in 2016.

JR Tokai and the Japan Railway Construction, Transport and Technology Agency have been placing construction orders related to the maglev project since 2015.

The four contractors each won three to four orders out of the 15 placed for the high-speed line before prosecutors began probing them late last year.

Taisei rebutted the allegations, saying in a statement that Okawa’s arrest was “totally unacceptable.” Taisei said it believes he did not break the antitrust law and that the company will continue to assert its innocence.

Separately, Kajima said the arrest of Osawa was “truly regrettable” and apologized for the resulting anxiety. “We will continue to fully cooperate in the investigation,” it said.

The ¥9 trillion ($85 billion) project will slash the roughly 400-km trip from Tokyo to Osaka to about an hour. The government has chipped in an unsolicited ¥3 trillion for the project in hopes of accelerating its completion time.