Photo/Illutration Investigators of the Tokyo District Public Prosecutors Office enter a building where Daiko Advertising Inc. is headquartered in Osaka’s Kita Ward on Sept. 5. (Arata Namima)

The bribery scandal involving a former Tokyo Olympics executive widened further on Sept. 5 when the Tokyo District Public Prosecutors Office raided the headquarters of Daiko Advertising Inc.

Six investigators entered the building that houses Daiko’s headquarters in Osaka’s Kita Ward before 10 a.m., while another four investigators arrived at the company’s Tokyo office to conduct a search.

Prosecutors believe the firm is yet another route through which firms involved with the Olympics funneled money to Haruyuki Takahashi, 78, a former executive of the Tokyo 2020 organizing committee.

Takahashi was arrested in August on suspicion of accepting 51 million yen ($363,500) in bribes from major men’s apparel company Aoki Holdings Inc., a sponsor of the Olympics.

Investigators believe Takahashi was paid to secure Daiko a subcontract for Olympics-related business from the advertising giant Dentsu Inc., a firm where Takahashi once worked.

The organizing committee for the Games had commissioned Dentsu to select and obtain official sponsors. Dentsu had outsourced some of its tasks for the Olympics to other advertising agencies, designated as sales cooperation agencies, and paid them subcontracting fees.

According to sources, Daiko told Takahashi that it wanted to become a sales cooperation agency, and Takahashi, a former Dentsu executive, approached Dentsu to make that happen.

Daiko was tasked with overseeing the signing of a Games sponsorship deal with a service-sector company.

The service company paid several hundred million yen to the organizers of the Games, while Daiko received its subcontracting fees from the organizers through Dentsu.

Out of the subcontracting fees, Daiko paid 14 million yen in three installments to a Tokyo-based consulting company managed by an acquaintance of Takahashi.

The acquaintance was a junior to Takahashi during his Dentsu days.

Prosecutors believe the money was exchanged as a quid pro quo for the company to be selected as a sales cooperation agency.

The revelation comes on the heels of an investigation by prosecutors into major publishing company Kadokawa Corp., another sponsor of the Games. Prosecutors believe the Tokyo-based publisher paid 70 million yen to the consulting company run by Takahashi’s acquaintance.

According to sources, prosecutors have interviewed Daiko officials on a voluntary basis.

Daiko, established in 1944, became a wholly owned subsidiary of advertising giant Hakuhodo DY Holdings Inc. in 2003.

It posted sales of about 28 billion yen in the business year ending in March 2022.