Tuesday, June 28, 2011

28/06 At shareholders meeting, Tepco rejects motion to abandon nuclear power

(TORU YAMANAKA/ AFP/GETTY IMAGES ) - Clad in white radiation protection gear, activists of Greenpeace hold a banner denouncing Tokyo Electric Power Corporation (TEPCO) before its shareholders meeting in Tokyo on June 28, 2011.
    TOKYO —At the downtown hotel where Tokyo Electric Power Co. executives met Tuesday with thousands of shareholders, about 250 riot police officers were called in to provide extra security. Anti-nuclear demonstrators crowded the sidewalks. The meeting lasted for six hours, a go-round of apologies and jeers.
    Facing shareholders for the first time since the onset of a nuclear crisis with no endpoint, Japan’s largest utility reappointed its chairman and rejected a motion for the company to abandon nuclear energy.
    For some in the raucous audience, those status-quo actions reinforced the image of a company that is tone-deaf to the despair it has caused. But the decisions, more tellingly, also signaled why Japan’s national debate over nuclear energy remains a stalemate of painful options.
    The nuclear catastrophe at Tepco’s Fukushima Daiichi plant has driven about 85,000 Japanese from their homes and pushed the utility toward financial ruin. But reliance on nuclear energy underpins the economy of resource-poor Japan, which since the crisis has even less capacity to take on the economic hardship that nuclear abandonment would bring.
    More than 9,000 shareholders attended Tuesday’s annual meeting, triple the record set last year. Some interrupted the meeting with yelling and were ushered out by security. Facing executives seated at the front of the room, one shareholder screamed that the company leaders deserved ritual disembowelment. Another said the executives should “jump into the reactors and die.”
    “On behalf of all of the executives, I want to apologize to investors and local people for all the trouble caused by the Fukushima Daiichi accident,” said the company’s chairman, Tsunehisa Katsumata.
    Briefly, Katsumata faced a motion calling for his own dismissal, submitted by a shareholder who said, nearly in tears: “If you are really feeling responsible, how dare you serve as chairman.”
    Some applauded the statement. But the motion was defeated.
    Many in attendance were elderly investors who once viewed Tepco as a safe place to put their money. Since the March 11 disaster, Tepco shares have lost nearly 85 percent of their value. One month ago, Tepco announced that the company had lost $15 billion for the latest fiscal year, which ended in March. The rating agency Moody’s this month cut Tepco’s credit rating to junk status.
    Some experts have warned that Tepco, which faces at least $136 billion in compensation payouts, could run short of funds as soon as this fall.
    To help meet the compensation claims, Tepco has secured massive emergency loans, and it intends to sell off many of its nonessential assets. It is also considering plans for layoffs and cuts to employee salaries, while asking executives to return bonus payments.
    The extent to which Tepco can pay the compensation claims, though, will be largely dictated by a contentious plan currently under debate in parliament. The bill calls for the creation of a new agency — a de facto fundraiser for Tepco — that could draw money from Japan’s major power companies, as well as from special-issue government bonds. Such a rescue plan has already been approved by Prime Minister Naoto Kan’s cabinet, but it so far has gotten little cooperation from the major opposition party.
    At the shareholders’ meeting, Katsumata, the chairman, promised that Tepco would pay out the compensation claims as soon as possible. He added that the company was trying its best to stabilize Fukushima Daiichi’s crippled reactors, three of which suffered meltdowns when an earthquake-tsunami combo knocked out the plant’s cooling systems.
    The company’s president, Masataka Shimizu, who has already signaled his intention to resign, added that radiation leaks could be under control by mid-July.
    The motion to abandon nuclear energy was submitted by a bloc of 402 shareholders. The group has submitted such a proposal every year for two decades, spurred by a lesser nuclear plant malfunction in 1989.
    This year, as usual, the motion was roundly defeated, as the bulk of Tepco’s shareholders submitted their votes over the Internet.
    The Tokyo Metropolitan Government is Tepco’s fifth-largest shareholder. The four largest are banks and insurance firms.
    Before the March 11 disaster, nuclear energy accounted for one-third of Tepco’s power-generating capacity, according to company data. Tepco has about 30 million customers, supplying power to the Tokyo region.
    It is the largest of Japan’s major power companies — and politically powerful as well, with historical ties to the government’s economy and trade ministry, responsible for promoting nuclear power and nuclear safety.

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