September 27, 2019 / 6:26 AM / 2 months ago

Kansai Electric president apologizes for payments scandal

TOKYO (Reuters) - Kansai Electric (9503.T) President Shigeki Iwane said on Friday he and 19 company employees, including other executives, received payments and gifts worth 320 million yen ($3 million) from “a person outside the company”.

The payments were made over seven years and most of the money had been returned, he said. Shares of the Japanese utility dropped 6.7 percent, underperforming the benchmark Nikkei average's .N225 1.4 percent slide.

Iwane did not identify the person who made the payments when he spoke at a hastily called press conference following media reports that the executives had received personal payments from a former official of a town that hosts one of the utility’s nuclear power plants.

“I offer my heartfelt apology for bringing about this situation, causing worry and trouble for people concerned and the society in general, at a time when trust in nuclear energy needs to be restored,” Iwane told the news conference.

Public trust in nuclear power generation was shattered in Japan when a massive earthquake and tsunami prompted three reactors to meltdown at Tokyo Electric Power’s (9501.T) Fukushima Daiichi nuclear power plant in 2011.

Iwane said no favors were given in exchange for the payments and business between Kansai Electric and a company related to the person who made the payments was conducted properly.

After media reports of the payments, Japanese Trade and Industry Minister Isshu Sugawara said it would be outrageous if the reports are true.

The Kyodo news agency said an investigation by tax authorities had shown the payments were made by a deputy mayor, who had since died. The official told tax authorities that the payments were a token of appreciation to the officials for supporting the town, whose economy relies heavily on the plant, Kyodo reported.

Iwane told the news conference he would implement steps to prevent a recurrence. These measures would be carried out under his leadership, he said.

Iwane said the people involved, including himself, had been punished within the company. He and Chairman Makoto Yagi had taken pay cuts, Iwane said.

A Kansai Electric spokeswoman declined to give details of the paycuts or the penalties.

(This story has been refiled to correct typo in headline.)

Reporting by Kiyoshi Takenaka; Editing by Muralikumar Anantharaman and Neil Fullick

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