Japan Accuses 9 Companies of Rigging Bids : Asia: The electronics case provides new evidence of how some of the country’s markets are kept closed.

Providing fresh evidence of how some Japanese markets are kept closed, Japan’s Fair Trade Commission on Monday accused nine electrical machinery makers of illegal bid rigging.

Among the firms accused of anti-competitive practices are some of Japan’s most famous electronics firms, including Hitachi Ltd., Toshiba Corp. and Mitsubishi Electric Corp. Officials at the nine firms allegedly held negotiations to divide up contracts for electronic control systems and other components needed for sewage projects.

The firms are suspected of rigging bids at least since 1990, according to Japanese media reports. The Fair Trade Commission’s accusations lodged with prosecutors on Monday focus specifically on alleged 1993 rigging of bids for contracts from the Japan Sewage Works Agency, a special corporation supervised by the Construction Ministry.

Bid rigging, known as dango , and other forms of corruption have long been widespread in Japan’s construction industry, which has been hit by a series of scandals in recent years. Major electronics firms have not previously been the target of this kind of criminal accusation. Charges were made Monday only against the firms, not individuals, but the possibility remains that some executives could face prosecution.

Early last year, partly in response to U.S. pressure, Japan announced a series of measures aimed at enhancing the “transparency, objectivity and competitiveness” of bidding on public works contracts.

Full implementation of those measures, which are meant to make public works projects more accessible to foreign contractors, is scheduled to begin next month.

Monday’s action, the first time in two years that the Fair Trade Commission has brought criminal charges against any firm, was generally seen as part of the Japanese government’s drive to establish a more open and honest system of awarding public works contracts. Many analysts doubted, however, that it would have much effect.

“It’s more in the category of wrist slapping than a major crackdown,” said Chuck Goto, an electronics industry analyst with Smith Barney International. “I don’t think it’s something that would reach the upper levels of management. It probably has more to do with fair bidding practices in the future. I think it’s part of the effort to change the bidding practices for public works projects.”

The other firms accused in the complaint are Fuji Electric Co., Meidensha Corp., Yaskawa Electric Corp., Nissin Electric Co., Shinko Electric Co. and Takaoka Electric Manufacturing Co. The firms generally had little public response to the charges.

“It is a deep regret that the companies are accused by the Fair Trade Commission,” said Kakutaro Okamura, a Toshiba spokesman. “However, since the prosecutor’s investigation will take place, we decline further comment.”

Some Japanese media reported that at least part of the fault for the alleged bid rigging may lie with the Sewage Works Agency itself. The Daily Yomiuri newspaper reported that a senior agency official had in 1989 contacted representatives of the five biggest firms named in Monday’s complaint and requested that they rig bids on public works projects.

“The (sewage) agency was reportedly angered by local governments’ practice of designating specific companies to undertake public works projects,” the newspaper reported.

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Times researcher Chiaki Kitada in Tokyo contributed to this report.