Tokyo prosecutors raid ad giant Dentsu as Olympics scandal widens

FILE PHOTO: Dentsu's logo is seen at its head office building in Tokyo Japan, August 9, 2019. Picture taken on August 9, 2019. REUTERS/Kim Kyung-Hoon/File Photo

TOKYO (Reuters) -Tokyo prosecutors raided the headquarters of ad agency Dentsu Inc and an events company on Friday, part of a widening scandal into corruption during the Tokyo 2020 Olympics.

The companies are being investigated on suspicion of rigging bids for contracts related to Olympics test events, public broadcaster NHK and other domestic media reported.

The new probe follows a sponsorship bribery scandal that also saw Dentsu Inc offices raided earlier this year.

Shares in Dentsu Group Inc, the parent company of Dentsu Inc, finished 2.7% lower on the news of the fresh probe while shares in the event company Cerespo Co Ltd, which media also said was raided, tumbled 11%.

The Tokyo District Public Prosecutors Office and the Japan Fair Trade Commission declined to comment on the reports of suspected bid-rigging.

"We continue to fully cooperate with this investigation," Dentsu said in a statement.

Cerespo did not respond to a request for comment.

The raid was conducted after advertising agency ADK Holdings informed the Fair Trade Commission of its involvement in collusion on bid-rigging, Kyodo news agency said. A representative for ADK declined to comment.

Reporting by a company of its involvement in wrongdoing can often result in leniency from regulators when penalties are handed out.

In the earlier bribery scandal, Haruyuki Takahashi, a former member of the Tokyo 2020 Olympics board and before that a Dentsu Inc executive, was arrested in August on suspicion of receiving bribes from Olympic sponsors.

Executives from ADK, suits retailer Aoki Holdings and publishing firm Kadokawa have also been arrested in connection to the bribery scandal.

Dentsu Inc is part of the domestic arm of advertising behemoth Dentsu Group Inc. The group, valued at some $9 billion, also has an extensive international business.

($1 = 138.4800 yen)

(Reporting by Elaine Lies, Sakura Murakami and Daniel Leussink; Editing by Edwina Gibbs)

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