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2 men found guilty over Tokyo-Osaka maglev project bid-rigging

This photo shows the rounded nose of the improved L0-series train that reduces wind resistance, in Tsuru, Yamanashi Prefecture, on Oct. 19, 2020. (Mainichi/Keisuke Umeda)

TOKYO (Kyodo) -- A Japanese court on Monday found two men guilty of rigging bids for construction work on the Tokyo-Osaka maglev train project involving four major contractors.

    The Tokyo District Court handed down an 18-month prison term, suspended for three years, to both Ichiro Osawa, a 63-year-old former civil engineering sales division manager of Kajima Corp., and Takashi Okawa, a 70-year-old former managing director of Taisei Corp.

    In handing down the ruling, Presiding Judge Hideo Nirei said both defendants "played leading and indispensable roles."

    Nirei said the four major contractors lost public trust by arranging to secure a national project despite having declared that they will not engage in bid rigging.

    The court also fined Kajima and Taisei 250 million yen ($2.35 million).

    Taisei expressed an intention to appeal the ruling, while Kajima said it will explore its options.

    The defense lawyers had argued during the trial that the pair's actions did not constitute a crime because Central Japan Railway Co., which ordered the project, had handpicked a contractor and therefore no competition existed in the first place.

    But the court said it was obvious that JR Central pursued cost reduction through competition among companies.

    Prosecutors had sought two-year prison terms for both men and fines of 300 million yen for the firms.

    According to the indictment, Osawa and Okawa met with former executives of Obayashi Corp. and Shimizu Corp. between 2014 and 2015 and agreed to decide on the winners of the Shinagawa and Nagoya station contracts in advance, exchanging information related to the bidding prices.

    Obayashi and Shimizu voluntarily reported to the Japan Fair Trade Commission on their actions based on the leniency system, and prosecutors indicted only the firms.

    In October 2018, the district court ruled there were collusive ties between the four major contractors, ordering Obayashi and Shimizu to pay fines of 200 million yen and 180 million yen respectively, for violating the antimonopoly law.

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