Dentsu India IT raids rattle Japan HQ; APAC asks employees to work from home

The Income Tax Department’s searches at Dentsu India’s offices have sent ripples through the Japanese advertising giant’s global organisation, with senior leadership in the Asia-Pacific (APAC) region stepping in to manage employee concerns following the multi-city operation, people familiar with the developments said.

A senior APAC leader asked employees in India to work from home amid the ongoing uncertainty surrounding the searches, according to people familiar with the matter. Employees have not been informed how many days they must follow the work-from-home advisory. An APAC townhall was held on Tuesday to discuss business developments in the region. 

The development underscores the seriousness with which Dentsu’s regional and global leadership is viewing the Income Tax action, which began at the company’s multiple offices in the country on Tuesday.

A senior Dentsu executive confirmed the development but requested anonymity given the matter's sensitivity.

The APAC leadership has also communicated to employees that the issue is “very serious” and cannot be disclosed, according to people familiar with the communication. The message has added to anxiety within the organisation, particularly among employees who were present at the offices when the searches began.

Dentsu India has not commented on the developments.

Anxiety spreads beyond Mumbai

The search at Dentsu’s Worli office in Mumbai had already unsettled employees, with Income Tax officials restricting movement within the premises and examining documents and electronic devices. Some employees’ personal mobile phones and laptops were also taken for examination, according to people familiar with the operation.

The developments have now triggered concern among employees outside Mumbai as well.

A Dentsu executive based in Bengaluru was so rattled by the developments that he used a second phone number to contact friends and family members, according to a person familiar with the matter. 

The incident reflects the degree of apprehension that has spread internally following the searches and the uncertainty over what the tax authorities are examining.

Employees have been left seeking clarity over the scope of the operation, even as the company remains constrained in what it can communicate while the investigation is underway.

“The issue is very serious and cannot be disclosed,” is understood to have been the message conveyed by APAC leadership to employees.

The lack of information has fuelled speculation internally and across the advertising industry about the nature of the investigation. The previous searches and regulatory actions involving Dentsu India have also added to the uncertainty.

From Worli to APAC

The Income Tax operation began around 10 am on Tuesday at Dentsu India’s Mumbai and Delhi offices and subsequently appeared to widen to other locations, including Bengaluru, according to people familiar with the developments.

The intensity of the action has made the development particularly significant for Dentsu’s global leadership.

For employees at the Worli office, the search involved restrictions on movement, while some staff arriving after the operation began were unable to enter the premises. Personal electronic devices were also examined by officials.

The intervention from APAC leadership indicates that the fallout is no longer being viewed as a local India issue alone.

That is particularly important given India’s growing importance to Dentsu Group’s global growth strategy. Dentsu’s financial disclosures indicate that India was among its better-performing markets in 2026. 

In the first quarter, India was the only market in Dentsu’s APAC portfolio to register organic growth while the broader APAC business contracted 7.5%. India was also placed in the group’s higher-growth category in the second quarter.

A sensitive moment for Dentsu

The searches therefore come at an awkward time for the Japanese advertising group.

While several major international markets have faced pressure, India has emerged as a relatively strong market for Dentsu. The company has been investing in the country and positioning India as an important component of its future growth story.

Any prolonged disruption could consequently have implications beyond the immediate tax inquiry, particularly if it affects client servicing, employee confidence or senior management attention.

Industry executives are also watching closely to determine whether Tuesday’s action represents a standalone tax investigation or whether it could develop into a broader regulatory matter.

“There is a lot of speculation because Dentsu has undergone regulatory scrutiny before. The question everyone is asking is whether this is a completely new matter or whether the department found something connecting to an older investigation. Until there is an official explanation, it would be wrong to draw conclusions,” a senior industry leader had said.

Questions over whether it is a new case

Dentsu India has faced regulatory scrutiny in the past. The Income Tax Department searched its Mumbai office in 2022 in connection with an investigation involving one of its clients. 

In December 2024, the Enforcement Directorate searched 19 locations across Mumbai, Delhi and Gurugram in a money-laundering investigation linked to an alleged ₹137-crore embezzlement case.

Dentsu had maintained that the 2024 matter related to alleged fraudulent activity by third parties and former employees associated with a specific business unit and said it had alerted authorities about the alleged wrongdoing in 2021.

The advertising group has also featured in the Competition Commission of India’s wider examination of competition practices in the advertising industry. However, there is currently no established connection between those matters and Tuesday’s Income Tax search.

The Japanese parent itself has faced major governance scrutiny following investigations into alleged bid-rigging connected with contracts related to the Tokyo 2020 Olympics. Dentsu and other companies were subsequently indicted in Japan.

What happens next

The immediate uncertainty is around what the Income Tax Department is examining and whether the searches will lead to further regulatory action.

It also remains unclear whether the electronic devices examined during the searches will form part of a wider investigation into Dentsu’s financial records or business practices.

For Dentsu’s employees, however, the impact is already being felt.

The decision by APAC leadership to ask employees to work from home, coupled with the message that the matter is serious and cannot be disclosed, has deepened uncertainty within the organisation. The concern has also spread from employees directly caught up in the Mumbai searches to executives and staff across other Indian offices.

For Dentsu’s global leadership, the stakes are potentially higher because the India business has increasingly become a source of growth stability for the group at a time when other international operations remain under pressure.

The Income Tax Department has yet to publicly explain the scope of the operation, while Dentsu India has not issued a detailed response.

For now, the most significant development may be that what began as a tax search at Indian offices has become a matter of concern for Dentsu’s regional leadership — and, increasingly, its global organisation.