June 27 (Bloomberg) -- Tokyo Electric Power Co. won approval from shareholders to give the government control of the company, once the world’s biggest private electricity utility.
Shareholders of the company known as Tepco approved proposals to allow the government to get more than 50 percent of voting rights in return for 1 trillion yen ($12.6 billion) in capital infusion. The appointment of 11 directors, including turnaround lawyer Kazuhiko Shimokobe, who will be the next chairman, was also approved.
The March 11, 2011, earthquake and tsunami that caused meltdowns and radiation leaks at Tepco’s Fukushima Dai-Ichi nuclear station forced the utility to seek a government bailout to help meet costs for compensation and damages. Tepco, which had a 782 billion yen loss last fiscal year, expects to return to profit in two years if the government approves an increase in electricity rates and the restart of the Kashiwazaki Kariwa nuclear station.
“The Japanese people have lost a lot of their trust in Tepco,” Naoki Inose, vice governor of the Tokyo Metropolitan Government, which is the utility’s largest shareholder, said today at the meeting. “It’s not easy to restore trust once lost. Tepco must work on reforming itself.”
The Tokyo city government demanded in its proposals that Tepco increase its transparency by allowing a third party to examine the utility’s costs. Its other proposals called for Tepco to lower its costs and seek cooperation with other companies to replace the utility’s aging thermal power plants.
A group of 402 Tepco shareholders asked the utility to end its use of atomic power and to sell its transmission and distribution assets to accelerate compensation payments to those affected by the catastrophe.
All of the proposals by the Tokyo government and individual shareholders were rejected at the general meeting today.
Tepco said 4,471 shareholders attended the meeting, which lasted for 5 hours and 31 minutes, today at the Yoyogi National Gymnasium in Tokyo. There were 9,309 attendees at the utility’s meeting last year.
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