Tokyo prosecutors and Japan's fair trade watchdog on Friday searched the head office of ad giant Dentsu Inc. and the home of a senior official of the Tokyo Olympics organizing committee over alleged bid rigging for the rights to draw up plans for test events for the 2020 games.

The searches, also covering Tokyo-based event production company Cerespo Co., were conducted as authorities believe there was an unfair restraint of trade. This comes on the back of the criminal investigation surrounding accusations of bribery involving a former games organizing committee executive that surfaced earlier this year.

Rigging is suspected in the 26 open bids held in 2018 for the rights to plan test events. These were awarded to Dentsu and eight other companies, as well as a consortium. The test events -- held so organizers can check for potential problems with operations, security and guiding audiences -- were carried out between 2018 and 2021, before the games were held in the summer of 2021 amid the coronavirus pandemic.

The amount of the contracts totaled more than 500 million yen ($3.6 million), with the price of each ranging from 4 million yen to 60 million yen, according to sources familiar with the matter.

Dentsu won bids for five events for about 80 million yen, while Cerespo won another five for about 116 million yen on its own and one event under the consortium for 13 million yen.

Prior to the bids, the organizers, with assistance from Dentsu, had created a list of advertising firms and event management firms that categorized the companies according to their respective experiences in each sport. The list is suspected to have been used in arranging successful bidders.

Dentsu admitted to being searched and said, "We apologize for causing trouble. We will fully cooperate with (the investigation)."

Tokyo Gov. Yuriko Koike said the criminal investigation was "very regrettable," adding she has instructed her government to fully cooperate with it.

On Thursday, the metropolitan government separately launched a probe into the suspected bid-rigging and plans to compile an interim report within this year at the earliest after holding hearings of officials involved in the test events.

The searches by the prosecutors and the Japan Fair Trade Commission came after another Japanese advertising agency, ADK Holdings Inc., reported to the watchdog that it had participated in bid rigging.

The prosecutors recently launched an investigation into the case, in addition to a scandal involving the alleged receipt by Haruyuki Takahashi, a former Tokyo Olympic executive, of 200 million yen in bribes from five companies, including ADK.

Dentsu was raided by the special investigation squad of the Tokyo prosecutors in July over the bribing scandal.

By reporting the alleged violation of the antitrust law and offering to cooperate with the watchdog, ADK is hoping for leniency in the form of a reduction in fines.

==Kyodo

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