The ongoing bribery scandal connected to the Japanese Olympic Committee (JOC) and their largest advertising group – The Dentsu Group – continues to widen following a number of charges filed against the company and others, in late February of this year.
To date, seven companies have been indicted, along with 15 arrests of high-ranking advertisement officials. This includes a confession from Shinichi Uneo, the former president and CEO of Asatsu-DK Inc. (ADK), who confirmed the allegations were accurate. Uneo’s confessions link the activities of ADK to Haruyuki Takahashi of Dentsu. Dentsu ($13.0 billion USD gross billings) and ADK ($2.7 billion USD gross billings) are the first and third largest advertising agencies in Japan. Within the last year, Dentsu has seen a 14.66% decrease in stock prices following the breaking of the scandal, which may be linked to the scandal.
Takahashi, who was arrested in late August 2022, is believed to have accepted bribes from a number of agencies. According to prosecutors, Dentsu and five other marketing companies – Cerespo, Fuji Creative, Hakuhodo, Tokyu, and Same Two – illegally agreed to assign contracts for the Olympic Games and test events, in violation of public trust. The Japanese government reported that nearly $13 billion – and potentially more was – spent to help organize the Games, most of which was public funds. Prosecutors also allege that nearly $150 million was paid between the companies regarding the contracts for affair management. The contracts in question were managed between all of the firms for test events leading up to and during the Olympic Games, which are highly competitive between firms.
Back in 2013, when the 2020 Olympic bids were first finalized, Dentsu acted as a significant catalyst for the selection of Japan to be the site for the event, which was delayed to 2021 due to the COVID-19 pandemic. Upon appointment, Dentsu became the primary advertisement agency for the Games and raised $3.3 billion locally. In June of 2021, the true cost of the Games was released, followed closely by the confession by Hironori Aoki – of Aoki Holdings – of paying funds to Takahashi to bring the Games to Tokyo. This has further marred the legacy of the 2020 Games and brings into question the ethics of cities bidding to host Olympic events. The Games had previously fallen under scrutiny from the Japanese population for the incredibly high price associated with the preparation and running of the Games ($13 Billion USD), over half of which was accounted for by taxpayers.
As of March 12th, there are not any trial dates set for any of the companies listed regarding the scandal, however, there are concerns regarding its potential impact on Sapporo’s bid to host the 2030 Winter Olympics.