Kansai Electric Power Co. displayed a remarkable lack of awareness about crisis management and adhering to societal norms. The utility must completely weed out the corruption that has gone on for many years and make a fresh start.
Kansai Electric has released details of an internal investigation into the scandal in which 20 senior officials, including Chairman Makoto Yagi and President Shigeki Iwane, received hefty sums of money and goods from a former deputy mayor of the town of Takahama, Fukui Prefecture, where the utility's Takahama nuclear power plant is located.
Yagi received gold coins and other items worth a total of 8.59 million yen, and Iwane accepted goods worth 1.5 million yen. In addition, a managing executive officer and a former executive vice president each received cash and items worth more than 100 million yen. The disclosed details are jaw-dropping.
The former deputy mayor had close ties to a local construction company. This company's sales skyrocketed after it received orders from Kansai Electric for projects related to the nuclear plant. The company gave the former deputy mayor 300 million yen, nominally as a commission. This pattern has whipped up suspicions of collusion.
According to the investigation report, Kansai Electric provided the former deputy mayor with information relating to construction projects. On some occasions, officials of the local construction company were present when the former deputy mayor handed money and goods to senior Kansai Electric officials.
The report concluded the Kansai Electric side "did not recognize" any linkage between the provision of information and the money and goods. But supposing senior officials had accepted payoffs after being asked for a dishonest favor, it would conflict with the rules against bribery in the Companies Law. One wrong step and they could be held criminally liable.
Kansai Electric will establish a new third-party committee to examine whether employees or senior officials at the utility's nuclear power division or officials connected with the Mihama and Oi nuclear power plants, which are both in Fukui Prefecture, also received dubious money and gifts. The committee must conduct an exhaustive investigation.
Details about the former deputy mayor's long-standing relationship with Kansai Electric also have become clear. For many years, it was customary for many Kansai Electric senior officials to attend New Year parties, cherry blossom viewing parties and birthday parties thrown for the former deputy mayor. The lengths to which this public utility went to avoid displeasing a specific person can only be described as extraordinary.
Kansai Electric left relationships with the former deputy mayor and the handling of the received money and gifts up to the individuals involved. The company must seriously reflect on its inability as an organization to deal properly with this situation.
Based on the internal investigation, Kansai Electric last year imposed punishments such as cutting the pay of the president and other officials. However, the managing executive officer who accepted cash and items worth more than 100 million yen was given only a strict warning. This seems to be barely a slap on the wrist.
Kansai Electric had decided to delay announcing the investigation's findings because it said receipt of the goods was "inappropriate but not necessarily illegal." It was not even reported to the company's compliance committee or board of directors. At this year's general shareholders meeting, the promotion of a senior official who received money and goods was approved.
Kansai Electric should keep firmly in mind the fact that unless it fundamentally overhauls its corporate governance, it has no hope of regaining the public's trust.
(From The Yomiuri Shimbun, Oct. 3, 2019)
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