National / Crime & Legal

FTC files criminal complaint against four Tokyo-Osaka maglev contractors over alleged bid-rigging

Kyodo

The Fair Trade Commission on Friday filed a criminal complaint against four major contractors for their alleged involvement in bid-rigging over contracts related to a Tokyo-Osaka maglev train link.

The anti-monopoly body lodged the complaint with the prosecutor general, suspecting Obayashi Corp., Kajima Corp., Shimizu Corp. and Taisei Corp. violated antitrust regulations. Prosecutors indicted the four companies, as well as two executives from Kashima and Taisei, later in the day.

Earlier this month, the special investigation squad of the Tokyo District Public Prosecutor’s Office arrested former Taisei managing director Takashi Okawa, 67, and Kajima’s civil engineering sales division manager Ichiro Osawa, 60, on suspicion of bid-rigging.

Prosecutors suspect the two conspired with former executives of Obayashi and Shimizu and predetermined contract winners in tenders between 2014 and 2015 for construction work at Shinagawa and Nagoya stations.

According to Central Japan Railway Co. (JR Tokai), the operator of the maglev project, two joint ventures led by Shimizu and Obayashi won contracts in 2015 for work at Shinagawa Station in Tokyo, while a joint venture led by Obayashi secured a contract in 2016 for work at Nagoya Station.

In December, the prosecutors and the FTC searched the headquarters of all four companies. Seeking exemption from punishment under leniency rules, Obayashi and Shimizu have told the commission they engaged in bid-rigging, but Taisei and Kajima are believed to have denied the allegations.

The maglev train line will connect Tokyo and Osaka in about an hour. The government has provided a total of ¥3 trillion ($29 billion) for the ¥9 trillion project aimed to be completed by 2037.