Wakachiku suspended from ODA projects

Wakachiku suspended from ODA projects

TOKYO (Dow Jones): Japan's foreign ministry said Friday it has suspended Wakachiku Construction Co. and an unlisted company from receiving orders for Official Development Assistance, or ODA, yen-loan projects, starting today.

The ministry said it meted out the punishment because Wakachiku submitted a false report to the Indonesian government in connection to a 5.25 billion yen (about US$426,800) ODA project in Indonesia.

Although the ministry didn't reveal the nature of the false report, an official at the Japan Bank of International Cooperation, or JBIC, said Wakachiku reported one of the people who were sent to Indonesia had "retired" from the company, even though this person was still receiving money from Wakachiku.

Furthermore, this person was assigned as a consultant to the 5.25 billion yen ODA project in Indonesia, which violated ODA guidelines that require project consultants to be fully independent from companies that bid on projects.

JBIC is one of the Japanese government's affiliated banks that provides ODA financing.

As part of the ministry's penalties, Wakachiku will be prohibited from receiving orders for ODA's yen-loan projects for two months beginning today.

The unlisted firm, called "Japan Port Consultant," will be prohibited from getting orders for ODA's yen-loan projects for one month starting today, the ministry said.

Wakachiku shares fell as much as 2.8 percent before finishing unchanged at 106 yen in Tokyo trading Friday.