Tepco president quits as firm reports $15bn loss
- 20 May 2011
- From the section Business
The president of Tepco, which operates Japan's crippled Fukushima nuclear power plant, has resigned as the firm reported a loss of 1.25tn yen ($15.3bn; £9.4bn) for the past financial year.
Masataka Shimizu will be replaced by managing director Toshio Nishizawa.
Tepco's loss is a record for a non-financial firm in Japan.
The earthquake and tsunami that hit Japan on 11 March severely damaged the Fukushima plant and it has been leaking radiation ever since.
Mr Shimizu spoke to a packed news conference at its headquarters in Tokyo with Mr Nishizawa standing to his left.
"I wanted to take managerial responsibility and bring a symbolic close," said Mr Shimizu.
"We put the highest importance on experience and expertise in our business operations when we chose the person for the top post," he added.
His resignation had been widely expected.
The net loss of 1.25tn yen in the year to the end of March was the biggest in Japan's corporate history outside the financial sector. In the previous financial year, the company had reported a profit of 134bn yen.
Tepco's share price has fallen more than 80% since the earthquake.
"We want to sincerely apologise for our nuclear reactors in Fukushima causing so much anxiety, worry and trouble to society," Mr Shimizu said.
He was criticised for not making any public appearances in the two weeks after the disaster
Mr Shimizu was later hospitalised after complaining of dizzy spells.
Tepco's losses were considerably bigger than the next highest loss for a non-financial firm, which was the 812bn yen lost by Nippon Telegraph and Telecom in 2001-02.
However, its overall losses from the disaster are expected to be much bigger.
Thousands of people have been evacuated from the region around the nuclear plant, and the company has been charged with cleaning up the problem and paying compensation to the victims.
According to Bank of America Merrill Lynch, total compensation claims could reach as much as 11tn yen.
Last Friday, the government announced a plan to create an entity to help Tepco compensate the victims of the nuclear crisis.
Authorities have also been studying possible bail-outs, including using contributions from other utilities and taxpayer money.
But it has been very difficult for Tepco to borrow money since the government suggested banks should waive some of Tepco's debt, which raised concerns that the government might not fully support the company.
Tepco has not offered any guidance on its trading in the current year because it does not know how much it will have to pay in compensation.
It has announced plans to sell 600bn yen of assets to raise money.
The assets sold are expected to include its 7.9% stake in KDDI, the telecoms company that owns Japan's second biggest mobile phone network.