Photo/Illutration Investigators with the Tokyo District Public Prosecutors Office enter the Tokyo headquarters of Taisei Corp. in December 2017. (Asahi Shimbun file photo)

The Tokyo District Court found two major construction companies and two former executives guilty of bid-rigging on a high-speed rail project, a scandal the presiding judge said damaged public trust. 

The ruling on March 1 found Taisei Corp. and Kajima Corp. guilty of bid-rigging for construction of the Linear Chuo Shinkansen Line. The companies were each fined 250 million yen ($2.3 million).

Two former executives, Takashi Okawa, 70, a former managing executive officer at Taisei, and Ichiro Osawa, 63, a former department head at Kajima in charge of the maglev project, were also found guilty and given prison sentences of 18 months, suspended for three years.

In the ruling, Tokyo District Court Presiding Judge Hideo Nirei said, “Having four super general contractors representative of Japan engaging in bid-rigging for a national project severely damaged public trust in the construction industry.”

Two other major construction companies, Obayashi Corp. and Shimizu Corp., admitted to the collusion and paid fines of 200 million yen and 180 million yen, respectively.

However, Taisei and Kajima maintained their innocence and fought the charges in court.

The bid-rigging involved construction of maglev train stations at Tokyo’s Shinagawa district and Nagoya in central Japan.

Based on the testimony given by executives of Obayashi and Shimizu, the court ruled that the four companies between 2014 and 2015 colluded on how the construction project would be divided up and coordinated the bid amounts to be submitted.

The court concluded the motive for the bid-rigging was to obtain sufficient profits by avoiding price competition.

The ruling said, “free and fair competition was blocked thorough collusion” among the four companies.

An official with Taisei said the company was contemplating appealing the ruling, while a Kajima official expressed regret that the company’s arguments were not heeded and added that an appeal was being considered.