Mitsui arrests in corruption probe

POLICE today swooped on the offices of Mitsui, Japan's second-largest trading house, following the arrest of three of its employees and two former government officials on suspicion of bid rigging.

Three managers of Mitsui, one of Japan's elite companies, were picked up by police investigating allegations that they connived with officials from the Foreign Ministry to win a contract for a diesel generating plant on the island of Kunashri.

The Tokyo District Prosecutor's Office alleged that details of the Foreign Ministry secret budget for the plan were leaked to the Mitsui employees, enabling the company to outbid two rivals for the contract worth two billion yen (£11m).

Mitsui directors claimed that an internal investigation had found no sign of wrongdoing, but the case is more bad news for the Liberal Democratic Party of Prime Minister Junichiro Koizumi, racked by scandals involving top officials. The Foreign Ministry's reputation has been shredded by allegations of corruption.

The Mitsui case was reported to be linked to former Foreign Ministry official and politician Muneo Suzuki, forced out of the party last month and later arrested on suspicion of accepting bribes. Mitsui shares tumbled almost 2% on the Tokyo stock exchange today as traders feared the company would be excluded from government contracts.