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Scandal-hit head of Japan's Kansai Electric has no plans to resign

Stock Markets Oct 02, 2019 08:52AM ET
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© Reuters. Scandal-hit head of Japan's Kansai Electric has no plans to resign
 
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By Junko Fujita

TOKYO (Reuters) - The president of Japan's Kansai Electric Power Co (T:9503) has no intention of resigning, he said on Wednesday, after admitting that he and 19 company employees had received payments and gifts worth 320 million yen ($3 million).

The scandal, at a time when the Japanese public's trust in nuclear power companies is already at rock-bottom, suggests that Prime Minister Shinzo Abe's push for better corporate governance still has a long way to go in the world's third-largest economy.

Shigeki Iwane, who admitted last week to receiving payments, told a news conference he wanted to stay in his position and regain the public's confidence.

"I want to fulfil my responsibilities by taking leadership in finding the cause of what happened and taking preventive measures," Iwane told a news conference broadcast live on NHK.

Kansai Electric earlier announced that its internal investigation found that 20 executives, including Iwane, had received cash, gift certificates and business suits from Eiji Moriyama, the now deceased deputy mayor of Takahama, where the company has a nuclear power station.

The report did not give an overall total of how much had been paid, but Iwane has previously said he and the others received 320 million yen in cash and gifts over a seven-year period.

Moriyama exerted influence over local government officials, the internal report said, and sought to influence them to support the local economy and use local businesses as suppliers.

The payments raise governance concerns because they were disclosed only after the matter was raised by the local tax bureau, said Moody's analyst Yukiko Asanuma.

"The cash payments ... add to existing negative public sentiment around nuclear power generation," Asanuma said.

BOX OF SWEETS

Iwane said on Wednesday that he was once given a gift by Moriyama that he thought contained sweets.

"When I opened it, I found gold coins in it. I tried to return the box but was told by our staffers it is difficult to return gifts to him. So I kept it in a safety box at our office," he said.

Iwane said that none of the executives had any intention of keeping the gifts and many had returned them to Moriyama.

Kansai Electric has long been reliant on nuclear power. Before the 2011 disaster at the Fukushima nuclear plant operated by Tokyo Electric Power (T:9501), Kansai relied on nuclear reactors for nearly half of its electricity generation.

The Fukushima disaster, in which three reactors suffered a meltdown after a massive earthquake and tsunami, shattered public trust in nuclear power. Kansai Electric operates three reactors, the most among Japanese utilities.

The mayor of Osaka, the largest shareholder in Kansai Electric, is considering seeking a management reshuffle at the utility, the Mainichi newspaper reported on Tuesday.

The city of Osaka owns close to 7.3% of Kansai Electric, Refinitiv data shows.

Scandal-hit head of Japan's Kansai Electric has no plans to resign
 

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