Japanese power firm executives quit over $3 million gift scandal

Kansai Electric Power Co. Chairman Makoto Yagi, left, and President Shigeki Iwane attends a press conference in Osaka, western Japan Wednesday, Oct. 9, 2019. (AP)
Updated 09 October 2019

Japanese power firm executives quit over $3 million gift scandal

  • Yagi's resignation is effective immediately, but Iwane will stay on until an independent probe into the scandal is complete

TOKYO: The chairman of a Japanese power firm resigned Wednesday after admitting he and other executives received money and gifts worth around $3 million from a town hosting one of their nuclear plants.
The money and gifts were given to some 20 executives over the course of seven years from 2011 by the late deputy mayor of Takahama town, where Kansai Electric (KEPCO) has a nuclear plant.
"I and (KEPCO president Shigeki) Iwane have decided to step down to clarify our management responsibility over the situation," KEPCO Chairman Makoto Yagi told reporters after a board meeting.
Yagi's resignation is effective immediately, but Iwane will stay on until an independent probe into the scandal is complete later this year, he said.
The gifts came to light after investigations by tax authorities into the late deputy mayor Eiji Moriyama.
According to local media, tax agency investigations found that Moriyama received a 300-million-yen commission from a local construction company hired for projects at the Takahama plant.
Moriyama reportedly told tax authorities he had decided to give KEPCO officials the money in the form of both cash and gifts as a token of his appreciation.
Yagi and Iwane apologised after the scandal came to light, but initially refused to step down.
They changed their mind after being heavily criticised and realising the damage being done to the public's trust in KEPCO, executives said.
On Wednesday Iwane apologised again, and said he will assume a "last mission" of revealing the whole truth of the scandal by cooperating with the independent probe committee, which is due to issue a report in December.
The executives have said they planned to return the gifts and money "at the right time".
"We were afraid our relationship with the local government would be damaged" if the gifts and money were rejected, Iwane has said.
It was not immediately clear if KEPCO, which runs the Takahama nuclear plant with four reactors in central Fukui prefecture, will face sanctions over the incident.


Founder of troubled Metro Bank steps down early as chairman

Updated 23 October 2019

Founder of troubled Metro Bank steps down early as chairman

  • Board member Michael Snyder will be interim chairman until a permanent successor is appointed
  • US entrepreneur Hill, who launched Metro Bank almost a decade ago, has agreed to accept the honorary position of emeritus chairman

LONDON: Vernon Hill, the founder of Metro Bank, has stepped down as chairman two months early, as the British lender continues its battle to recover from an accounting scandal.

US entrepreneur Hill, who launched Metro Bank almost a decade ago, has agreed to accept the honorary position of emeritus chairman and will remain a non-executive director of the bank until Dec. 31, the bank said on Wednesday.

Board member Michael Snyder will be interim chairman until a permanent successor is appointed, subject to regulatory approval.

News of Hill’s exit follows a near-catastrophic year for Metro after it disclosed a major accounting error that had under-reported its exposure to higher-risk loans by almost 1 billion pounds ($1.3 billion).

The bank, famed for its glossy branch network and unconventional customer perks including pet treats and weekend opening hours, was later forced to raise capital at expensive rates to plug the gap in its balance sheet.

It is due to report third quarter results later on Wednesday.

British regulators have yet to take any action against Metro or its management team for the January accounting error but the lender has warned that possible penalties could be substantial and could lead to criminal investigations.

Metro had said in July that Hill, who regularly referred to the bank’s customers as ‘fans’, would step down from his role after a permanent replacement had been found.

The bank did not say why that plan had changed, but a spokeswoman said the decision was entirely Hill’s and was not linked to the ongoing regulatory probes.

“The Board thanks Vernon for his vision which inspired and created Metro Bank ten years ago. He leaves a lasting legacy of creating fans through exceptional customer service and has revolutionized British banking,” Snyder said in a statement.

While customers warmed to his publicity shots starring pet dog Duffy, Hill endured a fractious relationship with some investors, both before and after the accounting error.

Metro originally claimed it had discovered the mistake before later admitting the Prudential Regulation Authority had uncovered the error first, leading to a crisis of confidence over the quality of the bank’s corporate governance.

Some investors also raised concerns about Hill’s lack of independence and questioned payments made to his wife’s architecture firm, which Metro later said would be phased out.

But he survived two threatened rebellions over his chairmanship and the bank’s shares, which have shed almost 90 percent this year, were broadly flat in response to the news.