Shareholders threaten lawsuit against TEPCO

11/04/2011
By

TOKYO (majirox news) — About 30 Tokyo Electric Power Company’s (TEPCO) shareholders will send a complaint this month to TEPCO’s management demanding recovery money for huge losses caused by the plunging value of TEPCO stock, alleging that TEPCO management is ultimately responsible for these losses. The amount they will ask and the specific management members who will be held accountable have not yet been decided, though some sources are suggesting that the damages sought will be in the region of just over 1 trillion yen ($12.8 billion), and that 60 senior managers who have worked at TEPCO over the past 20 years will be the targets.

At the end of February this year, TEPCO shares stood at 2,176 yen ($28), but currently stand at 300 ($4) up slightly from a 1-year low of 190 ($2.5)in June), chiefly as a result of the massive compensation bill, estimated to be several trillion yen, which will be paid to local residents following the disaster at the Fukushima Daiichi plant.

The shareholders claim TEPCO neglected to implement safety measures that would have prevented the nuclear accident at Fukushima Daiichi nuclear power plant, which occurred after the March 11 earthquake and subsequent tsunami. If TEPCO’s management does not respond to the shareholders’ complaint within 60 days, representatives of the shareholders will file a lawsuit with the Tokyo District Court.

“If you (TEPCO) don’t do anything and take accountability, we will find out who is responsible at the trial,” said one of the shareholders.

TEPCO management has come under fire from many quarters since March 11 for its lack of transparency and accuracy in reporting on nuclear issues, both before and after the accident. Other Japanese power companies, while not suffering from the same liabilities as TEPCO, have also been enmeshed in governance scandals. Kyushu Power Company, which has recently restarted a reactor (the first to be restarted in Japan after March 11) has been involved in an “astroturf roots” incident where employees were instructed to pose as pro-nuclear members of the public. The Japanese arm of Greenpeace, an international environment organization) has criticized the decision to restart (though the reactor will have to shut down in mid-December for routine maintenance), which it claims has been made without proper safety checks or consultation with the public.

TEPCO said they could not comment until they read the details of the shareholders’ complaint, which has yet to be submitted.

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