July 14, 2024

Tokyo Electric Power Defeats Shareholders’ Efforts to Exit Nuclear Business

The management of Tokyo Electric Power also pushed through the appointment of 17 board members, including the reappointment of its 71-year-old chairman, raising questions over the extent of the overhaul that the company has promised in the wake of the unprecedented nuclear disaster.

“I apologize from the bottom of my heart for the trouble and fear that we have brought to our shareholders, and to society,” said the chairman, Tsunehisa Katsumata, at a tightly guarded Tokyo hotel.

“We will do our utmost to bring the accident to a resolution and to work toward our mission of providing a stable source of electricity,” he said.

Some investors refused to be placated. “Go jump into a reactor and die!” one elderly man shouted at the row of executives present, before being escorted out by attendants.

At one point, when Mr. Katsumata tried to wrap up a question-and-answer session, angry shareholders rushed the stage. The session was continued.

Another woman, her voice shaking, told the entire board that they were unfit to lead the company. She said the company had ignored warnings about the dangers of nuclear power.

“Shame on you!” she cried out. “You should all be sacked.”

Tokyo Electric has been fighting for its survival after the March 11 quake and tsunami ravaged its Fukushima Daiichi nuclear power plant, about 225 kilometers, or 140 miles, north of Tokyo, triggering hydrogen explosions and releases of radioactive material in the worst nuclear accident since Chernobyl.

At least 80,000 people have fled their homes, while farmers and fishermen in the area have been forced to abandon their livelihoods. Factories within a 20-kilometer evacuation zone have also relocated or closed.

Tokyo Electric could now face as much as 11 trillion yen, or $136 billion, in compensation claims, analysts have estimated. The cost of dismantling the Fukushima plant may reach an additional 20 trillion yen, according to the Japan Center for Economic Research.

The dismal forecasts have cast a dark cloud on the company’s financial health. Last week, Moody’s cut Tokyo Electric’s credit rating to junk status, following a similar move by Standard Poor’s last month. Shares in Tokyo Electric have plunged more than 80 percent since the earthquake.

Prime Minister Naoto Kan has said the government should provide a safety net for Tokyo Electric to keep it afloat while it pays damage claims. Japan is considering setting aside about 230 billion yen from its planned 2 trillion yen supplementary budget to help Tokyo Electric, according to Bloomberg News.

Though Mr. Kan has been keen to hold Tokyo Electric accountable and avoid dipping into public funds, he wants to avoid a bankruptcy and the chaos that such a move would bring to stock and credit markets.

Financial institutions held about 30 percent of Tokyo Electric shares, while other corporations had 5 percent, as of the end of March. Individual investors held about 44 percent, while overseas investors held 17 percent. The company had about 933,000 shareholders as of March 31.

Nevertheless, many analysts have underscored the need for change at Tokyo Electric.

“A fundamental structural overhaul is needed at the board level to enable Tepco to rebuild its reputation and recover financially,” Glass Lewis, a U.S. company that advises institutional investors, said in a report before the shareholder meeting.

Individual investors at the meeting Tuesday aired similar demands.

About 9,300 investors attended the meeting, the most in Tokyo Electric’s history, forming long lines at the hotel venue. Anti-nuclear protestors also gathered at a nearby park to urge the company to abandon nuclear power.

But even as Tokyo Electric’s board faced a rowdy, hostile crowd on Tuesday, the company management, which has institutional investors and some individual investors on its side, never faced any real danger of defeat.

Tokyo Electric won the approval for the appointment of 17 board members, including Mr. Katsumata, the chairman, and the newly named president, Toshio Nishizawa, a longtime company executive. All but one of the directors are Tepco executives, according to company records.

A more contentious motion was brought by 402 shareholders who asked Tokyo Electric to shut down its existing nuclear power plants and not build any new ones. A similar motion had been rejected at each annual shareholders’ meeting for the past two decades.

“Do you really want to go down in history as rejecting this motion?” said an investor who identified himself as Masaki Kito, a lawyer. “Are you prepared to be responsible for the next big accident?”

But the motion was voted down, ending the six-hour meeting.

At the Fukushima plant, meanwhile, recovery efforts have been slow and perilous. A circulation system that would allow the plant’s reactors to re-use cooling water — which officials have called an important step toward resolving the crisis — was started up Monday but shut down just 1.5 hours later.

The system was designed to reduce the amount of contaminated runoff from the reactors, which are being kept cool with water. Tokyo Electric officials have said that 110,000 tons of radioactive water has already accumulated under the reactors, and there is a danger that the water will overflow.

Article source: http://feeds.nytimes.com/click.phdo?i=097d79d2a9e7617b3ff2b7d86a40e736

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