Kansai Electric to Reveal Fresh Details of Payoff Scandal

(Bloomberg) -- Kansai Electric Power Co. is set to disclose more details of a nuclear payoff scandal as investor scrutiny intensifies and the government orders an independent investigation.

The utility plans to identify the 20 company officials who accepted gifts, including details about the cash and goods they received, at a press conference at 2 p.m. Wednesday in Osaka, according to Kyodo News. The briefing will follow an extraordinary board meeting, according to a person with knowledge of the plan, asking not to be identified as the information isn’t public.

Kansai Electric is seeking to contain the damage from the revelation that executives took payments from a company that works on its nuclear plant in Takahama, which were funneled through Eiji Moriyama, one of the town’s former deputy mayors, who died in March. Moriyama-linked companies received 11.3 billion yen ($105 million) in orders from Kansai Electric over a three-year period, Asahi reported.

The scandal threatens to further undermine public trust in Japan’s nuclear power industry, an important platform within Prime Minister Shinzo Abe’s Liberal Democratic Party, and may delay the restart of three of the company’s idled reactors. Every month one of the restarts is delayed will saddle the utility with extra fuel costs of 3.6 billion yen, according to Nomura Securities Co.

Kansai shares, which slumped more than 15% in the three sessions through Monday, added 1.1% to 1,239.5 yen as of 9:06 a.m. in Tokyo. The benchmark Topix index slipped 0.7%.

Pressure on the utility mounted over the weekend after Chairman Makoto Yagi said he received cash and gifts starting in 2006. That clashed with a timeline offered earlier by President Shigeki Iwane, who said 320 million yen in money and goods was distributed to 20 officials between 2011 and 2018.

The goods included gold coins, foreign currency and gift coupons for tailored suits, Kyodo reported.

On Tuesday, Economy Minister Isshu Sugawara said the country can’t execute its energy policies, which include restarting nuclear plants, without maintaining public accountability, and that he has ordered an independent investigation into the payoffs.

“Trust in the company has completely crumbled,” Osaka Mayor Ichiro Matsui told reporters on Tuesday, according to Kyodo News, adding that the company’s management needed to be overhauled. Osaka is Kansai Electric’s top shareholder with a 7.27% stake, according to data compiled by Bloomberg.

--With assistance from Emi Nobuhiro.

To contact the reporters on this story: Aaron Clark in Tokyo at aclark27@bloomberg.net;Stephen Stapczynski in Singapore at sstapczynsk1@bloomberg.net

To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Aaron Clark

©2019 Bloomberg L.P.