Kansai Electric's chairman to resign over graft scandal: NHK

TOKYO (Reuters) – Kansai Electric Power Co Inc’s (T:) chairman will resign to take responsibility for a graft scandal that has rocked public trust in Japan’s second-largest utility, public broadcaster NHK reported, in a reversal of his stated intention to stay on.

NHK said Kansai Electric’s board approved the resignation of Chairman Makoto Yagi at a meeting on Wednesday. Earlier, local media reported that Yagi had informed people at the firm of his intention to step down due to growing criticism following the scandal from the government, local authorities and the public.

The firm’s stock rose as much as 2.6% in Tokyo trade versus a 0.8% decline in the benchmark Nikkei average share price index (). The stock is still down about 13% since the company disclosed the inappropriate receipt of gifts on Sept. 27.

President Shigeki Iwane is also expected to resign at a later date, after the conclusion of a third-party investigation into the scandal, the Nikkei business daily reported.

Osaka-based Kansai Electric said Yagi and Iwane would hold a news conference at 3 p.m. (0600 GMT) regarding management changes and the establishment of the third-party committee. The newly appointed head of that committee will hold a separate briefing at 7 p.m. (1000 GMT), the company said.

The two executives last week told a news conference they would not resign after Iwane said he and 19 colleagues had received payments and gifts worth 320 million yen ($3 million) from the late deputy mayor of the town of Takahama, where Kansai Electric has a nuclear power station.

An internal company investigation found the then-deputy mayor, Eiji Moriyama, exerted influence over local government officials and sought to influence them to support the local economy and use local businesses as suppliers.

The payments were disclosed after the matter was raised by the local tax bureau.

Takahama, a town of about 10,000 people in central Japan, had no comment on Kansai Electric’s findings about Moriyama, an official said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.