Japan's Fair Trade Commission has ordered a combined ¥1.64bn in surcharges against a network of Kanto-region condominium-renovation contractors that rigged bids for years, alongside cease-and-desist orders against two design consultancies that orchestrated the schemes.
The commission's tally lists 57 firm-level violations across the two schemes, a count that reflects only 42 distinct companies because several contractors, including HASEKO's renovation subsidiary, were named as violators under both schemes it uncovered. Of those, it issued cease-and-desist orders against 38 unique firms and surcharge orders against 37 unique firms, effective September 28.
In each scheme, a design consultancy hired by a condominium management association to help pick a contractor instead built a standing cooperative relationship with one contractor per project, decided in advance who would win, and passed that contractor the association's confidential design budget. Rival bidders then either submitted the price the winner relayed to them or declined to bid at all. One scheme, built around an Osaka-registered design consultancy and 36 contractors, ran from at least September 2021; the other, centered on a Tokyo-registered design consultancy and 19 contractors, ran from at least November 2021. Winning contractors typically paid the consultancy a fee equal to about five percent of the contract price, a practice the commission separately flagged to three construction-industry associations as a potential distortion of competition.
| Metric | Osaka consultancy scheme | Tokyo consultancy scheme | Combined |
|---|---|---|---|
| Violating firms named | 37 | 20 | 57 (42 unique firms) |
| Cease-and-desist order recipients | 33 | 18 | 51 orders (38 unique firms) |
| Surcharge order recipients | 33 | 17 | 50 orders (37 unique firms) |
| Total surcharges | ¥921.6mn | ¥716.3mn | ¥1.64bn |
HASEKO Reform, the renovation subsidiary of Tokyo-listed HASEKO Corporation, was named in both schemes. Its combined surcharge comes to ¥329.4mn, reduced 25 percent under Japan's leniency program, due by the same April 30, 2027 deadline set for all 50 surcharge orders. HASEKO says the subsidiary was raided by the commission in March 2025 and cooperated with the investigation from then on. The company said the subsidiary's chairman would resign effective September 28, its president will forgo 10 percent of monthly pay for three months starting this month, and other staff face disciplinary action. The parent expects to book the surcharge as a one-off non-operating loss for the current half-year but says its full-year earnings guidance published in May is unchanged.
Each contractor receiving a cease-and-desist order must notify the management associations whose renovation work it won under the scheme and run periodic antitrust training for staff handling condominium repair sales; the two design consultancies face parallel compliance duties of their own. The commission also asked three construction-industry trade associations to circulate its findings on the referral-fee practice to their members.