Prosecutors expand probe into scandal
TOKYO: Prosecutors yesterday raided the offices of two of the country’s biggest construction firms as they expanded an investigation into suspected collusion over contracts for an US$80 billion (RM326 billion) high-speed magnetic levitation (maglev) train line.
Investigators entered the offices of Shimizu Corp and Kajima Corp, here, yesterday, said the spokesmen for the two companies, in the latest scandal to hit corporate Japan following revelations of data fraud at major manufacturers.
The raids by prosecutors and antitrust agency officials came a week after officials launched an investigation into Obayashi Corp, another construction company, for suspected bid-rigging in maglev-related contracts.
While the scope of the probe broadened yesterday, the scale of the suspected wrongdoing remained unknown and prosecutors declined to comment.
Kajima shares plunged 4.6 per cent and Shimizu shares fell 3.7 per cent on news of the raids, while the Nikkei 225 index was 1.5 per cent higher.
Shares of Taisei Corp, another member of the so-called “big four” group of Japanese construction firms involved in the maglev project, were down two per cent, although a spokesman said it had not been raided.
Japan’s large and politically influential construction industry has been a frequent source of scandals such as bid-rigging.
Legislation has been tightened in recent years to prevent collusion over contract bids, and Obayashi last year required managers to sign a pledge to abide by antitrust laws.
The next year, however, the firm’s top management resigned following a public works scandal.
Backed by cheap government loans and running in addition to Japan’s extensive bullet train network, the maglev project linking Nagoya, Osaka and here has drawn criticism for its cost and lack of export potential. Reuters