Photo/IllutrationMakoto Yagi, left, chairman of Kansai Electric Power Co., and Shigeki Iwane, center, the company’s president, bow in apology at a news conference in Osaka on Oct. 9. (Tatsuo Kanai)

  • Photo/Illustraion

OSAKA--The chairman, executive vice president and three executive directors of Kansai Electric Power Co. resigned on Oct. 9 amid mounting criticism over the lucrative gifts that they and other bigwigs received from a former town official.

Makoto Yagi conveyed his intention to step down as chairman at a special board meeting held by the utility to discuss the scandal.

Just a week earlier, on Oct. 2, Yagi said at a news conference that he would remain as Kansai Electric chairman as a well as vice chairman of the Kansai Economic Federation. He is now also expected to leave the local business lobby.

Executive Vice President Ikuo Morinaka resigned from the board, as did the three executive directors: Nozomu Ushiro, Shigeki Otsuka and Satoshi Suzuki.

They were among 20 executives at Kansai Electric who received cash and other gifts worth a total of 320 million yen between 2006 and 2017 from Eiji Moriyama, a former deputy mayor of the town of Takahama, Fukui Prefecture, where Kansai Electric operates a nuclear plant.

Moriyama died in March at age 90.

Since then, further details about shady payments, including possible bribes, and contracts awarded to a company linked to Moriyama, have been reported.

The central government and the Osaka city government, the largest shareholder of the Osaka-based utility, have heightened pressure on the company for answers.

Another gift-receiver was Shigeki Iwane, president of Kansai Electric. He is expected to resign as chairman of the Federation of Electric Power Companies of Japan (FEPC), which comprises 10 regional utilities, by the year-end. He has held the FEPC’s top post for only about three months.

Iwane is expected to decide whether he will remain as president of Kansai Electric when a planned third-party panel releases the findings of its investigation into the scandal by the end of this year.

A report compiled last autumn by an in-house committee said Yagi, who previously served as manager of the company’s Nuclear Power Division, received about 8.59 million yen, including gold coins, from Moriyama.

Yagi returned most of the gifts, but he used certificates worth a total of 1 million yen to buy a tailored suit, according to the committee.

Morinaka, the current manager of the Nuclear Power Division, received about 40 million yen from Moriyama.

Iwane received but later returned 10 gold coins worth a total of 1.5 million yen, according to the in-house report.

News of Yagi’s resignation was welcomed, but Osaka city, Fukui Prefecture, where the utility operates a number of nuclear plants, and the Ministry of Economy, Trade and Industry said more needs to be done to get to the bottom of the scandal and improve the company’s governance.

“If the company intends to gloss over the fiasco only with the exit of the chairman, it will fail to reform its corporate culture,” Osaka Mayor Ichiro Matsui said on Oct. 9. “Measures should be exhausted to carry out a thorough overhaul.”

Fukui Governor Tatsuji Sugimoto said Yagi’s resignation indicates that Kansai Electric is determined to repair its governance and improve compliance.

“What is important is to find facts and compile measures to prevent a recurrence and explain them to the people of Fukui Prefecture,” Sugimoto said at a news conference the same day.

Industry minister Isshu Sugawara said the ministry will “make a response to Kansai Electric based on the results of a thorough investigation by the panel.”

Members of the third-party panel will all be outsiders, including legal experts.

The industry ministry is calling for an all-out investigation that casts a wider net concerning the gift-giving period and officials to be interviewed.

Although the Osaka city government asked the board to accept its recommendations for members of the panel, Kansai Electric was set to reject the request, citing doubts about impartiality.

When Moriyama’s gifts were received, the Kansai Electric executives often offered him information, such as rough budget estimates for engineering works projects before the utility placed its orders.

At that time, Moriyama served as an adviser for Yoshida Kaihatsu, a civil engineering company.

A Kanazawa Regional Taxation Bureau investigation showed that Yoshida Kaihatsu, based in Takahama, provided dubious funds of about 300 million yen to Moriyama.

Yagi was promoted to president of Kansai Electric in 2010 after serving as head of the Nuclear Power Division.

He replaced the president of Tokyo Electric Power Co. as FEPC chairman and oversaw the nuclear industry’s response to the 2011 triple meltdown at the Fukushima No. 1 nuclear plant, operated by TEPCO.

In June 2016, Yagi became chairman of Kansai Electric while Iwane was promoted to president from executive vice president.