1st LD Writethru: Japan's Obayashi Corp. admits breaching antitrust laws over maglev train project bid: sources

TOKYO, Dec. 19 (Xinhua) -- One of Japan's leading construction firms Obayashi Corp. has admitted to breaching antitrust laws connected to a bidding process for construction contracts for a new maglev train project, local media quoted sources close to the matter as saying Tuesday.

Japan's antitrust watchdog, the Japan Fair Trade Commission (FTC), heard from Obayashi that it was involved in obstructing the bidding process along with three other leading constructors, Taisei Corp., Kajima Corp. and Shimizu Corp., according to the sources.

Obayashi admitted to the FTC and prosecutors that it colluded with the three other contractors in deciding which of the companies would be awarded contracts, ahead of the formal bidding process.

Obayashi's admission of guilt means that despite the violation, the company will escape a fine, under the FTC's leniency rules.

Being that Obayashi was also the first to admit foul play will likely mean that under the rules the company will also dodge criminal charges.

The FTC along with the Tokyo District Public Prosecutor's Office on Tuesday raided the headquarters of both Obayashi and Taisei over suspicions of their involvement in violating antitrust laws.

It came a day after the headquarters of Kajima Corp. and Shimizu Corp. were also searched by prosecutors on allegations they too breached the antitrust laws concerning construction bids for Japan's first maglev train project.

The four major contractors collectively won bids for 15 of the 22 construction projects for a planned maglev train project, said Central Japan Railway Co., the operator of the 9 trillion yen (80.01 billion U.S. dollar) project.

All four companies being investigated, however, declined to comment on Obayashi's report to the FTC on Tuesday, as the antitrust investigation is currently in full-swing.

Obayashi's offices were searched earlier after it came to light that a Central Japan Railway Co. official may have leaked information to the firm pertaining to construction tenders.

Based on this privileged information, Obayashi is suspected to have encouraged its competitors to submit higher bids and in doing so out-pricing themselves from the tendering process, according to the sources.

This prompted suspicions that the four main companies may have violated Japan's antitrust law by fixing bid prices and determining tender winners ahead of the bidding process.

The maglev train would be the world's first that operates by using superconducting magnetic levitation technology to propel passengers at speeds of up to 500 kilometers per hour, far quicker than Japan's current Shinkansen bullet trains.

The trains are expected to be operational in 2027 between Tokyo and Nagoya, with the route being extended by 2045 to Osaka. Enditem