Dentsu Group fined 300 million yen for Tokyo Olympics rigging, former executive sentenced to 2 years in prison - Strict on individuals and minor impact on corporations?
On September 18, 2024, the Tokyo District Court held a hearing on a bid-rigging case related to the Tokyo Olympics, and the prosecution sought a two-year prison sentence for Koji Itsumi (57), a former assistant director of the sports bureau of Dentsu, and a fine of 300 million yen for the holding company Dentsu Group. The verdict will be handed down on January 30, 2025.
The prosecution alleges that the defendant, Itsumi, a former Dentsu executive, conspired with Yasuo Mori, 57, a former deputy director of the Tokyo Olympic Organizing Committee, who was convicted last year, to coordinate the work of the test event and the main event in 2018 and limit competition. On the other hand, while acknowledging the illegality of the test tournament, the defense pleaded not guilty to the management of the tournament and asked for a suspended sentence for the defendant Itsumi.
The total amount of planning work for the test event at the Tokyo Olympics, in which Dentsu was involved in order coordination, is estimated to be approximately 500 million yen, and the management work for this event is estimated to be approximately 43.2 billion yen. In response, Dentsu was fined 300 million yen. This is equivalent to about 0.69% of the total amount of 43.7 billion yen. On the other hand, if the defendant Koji Itsumi estimates that his annual income is about 20 million yen, his daily income is about 55,000 yen. When converted to a sentence of 2 years (730 days) in prison, it is equivalent to about 40.15 million yen.
In this case, the prosecution strongly criticized it as a "particularly serious case" in light of its social impact. On the other hand, although the defendant Itsumi was sentenced to two years in prison, the fine of 300 million yen against the Dentsu Group was insignificant considering the size of the company, which has annual sales of about 5.2 trillion yen, remuneration for Olympic operations, and costs paid by Japan society (such as damage to media resources and reputation).
In April of this year, Hakuhodo, a major advertising company, was fined 200 million yen in the bid-rigging case surrounding the Tokyo Olympics, and the former president of the subsidiary was sentenced to one year and six months in prison, suspended for three years.
The scandal surrounding the Tokyo Olympics has undermined trust in Japan's ability to host international events, and is believed to have had a negative impact on the suspension of Sapporo City's bid for the Winter Olympics and the sluggish momentum for the 2025 Osaka Expo.
In response to the scandal at the Tokyo Olympics, the Dentsu Group announced in December 2023 that " Efforts to Prevent Recurrence " has been released.
