Advertising giant Dentsu Inc. has said it will not take part in the biddings for new projects planned by the industry ministry for the time being.
The decision, announced Wednesday, was made in response to public criticism over the dubious process of how the company took on a task related to a key coronavirus relief program of the ministry.
Dentsu has established an in-house bureau for reviewing how the company should undertake state projects. The bureau is working on ensuring appropriate implementation of deals, including by checking respective forms of transactions and monitoring work processes.
An industry ministry expert panel is set to compile by the end of this year measures aimed at enhancing the transparency of the processes of commissioning private companies to undertake the ministry's projects. Dentsu is expected to wait for such measures to come out before it resumes placing bids for tasks of projects planned by the ministry.
At issue was the work to pay up to ¥2 million each in cash relief to small businesses and freelancers hit by the COVID-19 crisis in a project under the government's first supplementary budget for fiscal 2020.
The Service Design Engineering Council won the contract for ¥76.9 billion. The awarded work was subcontracted out to Dentsu for ¥74.9 billion and Dentsu outsourced the work to group companies. The repeated outsourcings triggered criticism that the whole consignment process lacks transparency.