Ex-Kajima Senior Employee Probed over Kickbacks in Fukushima Reconstruction Projects

The Yomiuri Shimbun

16:38 JST, March 1, 2021

A former senior employee of the Tohoku branch of leading construction company Kajima Corp. received huge kickbacks from subcontractors of a Kajima-led consortium undertaking reconstruction projects related to the Great East Japan Earthquake in Fukushima Prefecture, sources have said. The employee had served as the chief of the consortium.

The Sendai Regional Taxation Bureau has started an investigation of the man on suspicion of tax evasion in violation of the Income Tax Law. The taxation bureau is taking concerted actions with the Sendai District Public Prosecutors Office, with the filing of a complaint over suspicion of tax evasion in mind.

A person on the subcontractors’ side was quoted as telling prosecutors during voluntary questioning, “We handed him about ¥200 million in return for placing orders with us.”

In the 10-year period following the 2011 disaster, the amount of orders placed at Kajima for reconstruction projects such as building demolition and decontamination work in Fukushima Prefecture totaled more than ¥380 billion, including portions received in consortium projects.

The latest revelation illustrates a framework in which subcontractors who benefited from reconstruction projects gave kickbacks to a senior employee of a contractor. Kajima fired the man as punishment in December last year.

According to the sources, the man under investigation is a former manager of the sales division at Kajima’s Tohoku branch in Sendai. From around 2015 to 2018 when he served as the head of the consortium, among other positions, he received a large amount of kickbacks from subcontractors, including a demolition company in the Tokai region. He is suspected of having failed to report the money as individual income to tax authorities.

This consortium consisted of three major construction companies, including Sumitomo Mitsui Construction Co. and Tobishima Corp. It received orders from the Environment Ministry for six projects totaling about ¥27 billion, including the demolition of disaster-hit buildings in the town of Tomioka, Fukushima Prefecture.

With Kajima as the lead company in the consortium, many work orders in the projects were subcontracted not only to companies in the prefecture, but also to Kajima’s “assisting companies” outside the prefecture.

Typically in projects undertaken by a consortium, the head of the consortium is in charge of the overall work, with strong influence over the allocation of budgets and selection of subcontractors.

The former market manager at the Kajima Tohoku branch assumed the post in 2018. In the investigation, he is said to have admitted to receiving money, and was quoted as saying, “Some of them were loans.”

A former president of the Tokai region demolition company admitted to providing about ¥200 million as well as having paid the tab for dining at a high-class club by the former manager, the sources said.

The Yomiuri Shimbun submitted a written request to the former manager for an interview, but no response has been received.

A person related to the demolition company said, “The paying of kickbacks was only done by the former president.”

A Kajima official said the company is “fully cooperating in the investigation.”