June 28, 2011

Tepco Shareholders Reject Ditching Nuclear Power - Japan

Published on Tuesday June 28 2011 (AEST)

Tokyo Electric Power Co. shareholders on Tuesday rejected a motion to abandon nuclear power, a proposal that arose during a contentious meeting the drew a record turnout.
The motion had called for a moratorium on building new plants as well as shutting existing ones, in the wake of the radiation crisis at the company’s Fukushima Daiichi power plant in northeast Japan. Fuel rods in three of its reactors melted after the March 11 earthquake and tsunami critically damaged cooling systems at the plant, which is still spewing radiation more than three months later.

Tepco JP:9501 0.00% /quotes/zigman/527598 TKECY +10.90% ,as the company is known, didn’t release the final tally of the votes at its semi-annual general meeting. It also said shareholders approved the appointment of 17 board members and the reappointment of president-elect Toshio Nishizawa, who takes the helm from health problem-plagued Masataka Shimizu.

The reappointment was likely to disappoint those hoping for new leadership at the troubled utility.

“A fundamental structural overhaul is needed at the board level to enable Tepco to rebuild its reputation and recover financially,” corporate governance advisory firm Glass Lewis & Co. said in a statement on its website ahead of the meeting. See Glass Lewis proxy bulletin on Tepco.

More than 9,000 people attended the six-hour meeting, nearly three times as many as last year. One shareholder said Tepco executives should all jump into the reactors, and another suggested they commit ritual suicide to take responsibility, according to news reports.

On June 14, the government came up with a plan to help Tepco pay compensation to radiation victims, which some estimates put at over $100 billion. About 80,000 people evacuated from areas around the plant, and scores of farmers and fishermen have likely permanently lost their livelihoods. The plan hasn’t yet been approved by parliament. Read more on Tepco compensation plan.

In May, Tepco posted a loss of 1.25 trillion yen ($15 billion) for the year that ended in March, compared with a profit of almost ¥134 billion in the previous fiscal year.

Tepco shares ended trading Tuesday unchanged from the previous session at ¥316 — above their lifetime low of ¥148 reached earlier this month, but a far cry from prices above ¥2,000 that the stock fetched just before the disasters.The Nikkei Stock Average /quotes/zigman/715506 JP:NIK +0.74% added 0.7%.

The utility had been Japan’s top corporate issuer, with about ¥5 trillion in bonds outstanding. It had also paid an annual dividend of ¥60, which has been suspended.

Hours before Tuesday’s meeting was to take place, dozens of police gathered around the venue to make sure any protests remained orderly.

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