Photo/IllutrationKansai Electric Power Co. Chairman Makoto Yagi, left, and President Shigeki Iwane at a news conference in Osaka on Oct. 2 (The Asahi Shimbun)

Kansai Electric Power Co. on Oct. 2 disclosed a report on an in-house investigation into allegations that its executives received cash and other gifts from an influential town government official.

In its second news conference on the issue, the utility unveiled findings of the probe it had previously refused to publish.

The list of gifts from the late Eiji Moriyama, a former deputy mayor of Takahama, Fukui Prefecture, where one of the company’s nuclear power plants is located, included cash, gift certificates, coupons for custom-tailored suits and gold coins.

Two senior executives each received gifts worth more than 100 million yen ($933,600). Some received 10 million yen in cash at a time.

Kansai Electric earlier said 20 executives received gifts worth about 320 million yen in total, but details represent jaw-dropping revelations.

The report has cast light on the extraordinary relationship between Moriyama, who is said to have been a local bigwig, and the utility, especially its Nuclear Power Division. The document has also exposed the company’s dismal corporate governance, as indicated by its failure to tackle the problems it was facing.

Moriyama, who had deep connections with companies that have received contracts from Kansai Electric, harshly berated executives who refused to accept gifts, according to the report. The company sought cooperation from Moriyama over issues concerning its nuclear power operations, such as plans to expand its nuclear power plants.

The company claims the executives accepted the gifts out of concerns that ruffling his feathers could affect its nuclear power business and personally kept them with the intention of eventually returning them to him. But this reasoning is hard to understand.

Most of the executives who took gifts belonged to the nuclear business unit, and it was a practice that had been handed down over time at the division.

Some of the executives asked the company to keep the gifts, but the person in charge of such problems at the division told them to handle the matter on their own.

One person interviewed for the investigation reportedly said the company would have risked getting directly involved in the scandal if it had dealt with the problem as an organization.

Kansai Electric compiled the report one year ago and took disciplinary action against responsible executives. Among them, President Shigeki Iwane and Chairman Makoto Yagi returned part of their executive pay.

But the firm did not disclose the results of the internal investigation and the disciplinary measures, nor reported these facts to the board of directors.

While the company claims that the facts were shared among senior executives, the report has brought to the fore the shocking reality of the nuclear power business, which has long been criticized for being closed.

Yagi and the implicated executives at the division climbed the corporate ladder despite accepting these shady gifts. Iwane also received his own share of gifts, offered to celebrate his promotion to the post of president.

The report criticized their policy of simply following precedent, but this scandal has raised questions about the foundation of the company’s management.

Kansai Electric said it will set up a new investigation committee composed only of independent experts including outside lawyers to conduct a fresh inquiry that will cover a wider range of personnel and a longer period.

Moriyama held senior posts at multiple local companies linked to nuclear power business, including a civil engineering firm that has been one of the utility’s contractors and supplied funds for the gifts, and also served as an adviser for a Kansai Electric subsidiary.

The utility provided Moriyama with information about cost estimates and expected time frames concerning projects it planned to contract out to local companies.

The report claims these pieces of information did not affect the company’s decisions concerning the contracts. But the investigation did not involve interviewing Moriyama or any executives at the civil engineering firm.

The new fact-finding panel needs to delve into related issues.

Both Iwane and Yagi have declined to resign to take responsibility for the scandal. But their responsibility for this matter is evident.

--The Asahi Shimbun, Oct. 3