Tokyo Olympics clean-up hits big businesses

A few months after last year’s Tokyo Olympics, an Osaka liquidation company quietly began the job nobody wanted to admit was needed: the disposal of truckload after truckload of fluffy toys, branded clothing and other detritus from the most heavily sponsored sports event in history.

Some of the merchandise mountain — created for an event that cost twice what was first envisaged and was held without spectators — was dispatched to poor Cambodian villages. Some were donated to local childcare institutions, while some were sold off for a tiny fraction of the original price.

But since the summer, Japan has embarked on a far bigger, far darker and far more public post-Olympic clean-up: a rapidly ballooning investigation into alleged sponsorship-related bribery that has engulfed household-name companies and put top executives behind bars.

Haruyuki Takahashi, a powerful member of the Tokyo Games organising committee and a former senior executive at Dentsu, Japan’s biggest advertiser and arguably the country’s most influential company, has been in custody since August.

Takahashi’s arrest triggered internal panic over whether all sponsors would come under scrutiny for an event that in the end delivered almost no commercial benefit, said people at two of the Games’ “Gold” sponsor companies.

The founder and former chair of Japan’s biggest maker of business suits, Aoki Holdings, was also arrested in August, followed last month by the chair of Kadokawa, a major publisher which was closely involved in the Games.

Even Sun Arrow, which produced the unsold fluffy mascots, is reportedly under investigation over how it won the right to do so. Sun Arrow declined to comment.

“This is a clear-out, plain and simple, and it is going to claim more heads,” said a person close to one of the handful of Games-linked companies whose offices were raided by prosecutors this year.

If Japan was not seen to fully deal with suspected corruption from the Tokyo Games, then it would be unlikely to succeed in its bid to host the Winter Olympics in the northern city of Sapporo in 2030, the person added.

Long before the Olympic torch reached Tokyo in July last year, questions had swirled around the role of Dentsu, a company on which Games organisers leaned heavily as they secured roughly $3bn in sponsorship and set about staging one of the most expensive Games ever.

The advertising giant has admitted it is under investigation by prosecutors, as has smaller rival ADK and parking lot company Park24.

Dentsu was hired in April 2014 and was able to convince more than 40 Japanese companies to become sponsors. In the scramble to participate, sponsors accepted non-exclusive contracts, paying a fortune but often having to share the privilege with their main…