Let me quote the relevant section of the Japan Times article:.
http://search.japantimes.co.jp/cgi-bin/nb20110903a4.htmlThe bureau said Kansai Electric sold scrap metal left over from engineering work in Fukui Prefecture for a price at least ¥1 billion lower than going rates. The utility said it sold the scrap metal to the highest bidder after studying market prices. But the bureau concluded that the difference between the sales price and market rates can't be counted as expenses. It also reclassified around ¥3 billion in payments the utility made to subsidiaries as donations, which are taxable.
Why do I find this to be bizarre?
Japan's electric power companies are extremely political entities. Their political power has been the source of their profit. The government protects their regional monopolies while allowing them to charge their captive consumers handsomely. By law, power companies are allowed to set utility prices on the basis of their costs plus profits they decide to make! The pricing structure thus creates no incentive for power companies to be innovative. Surely they could afford to sell their scrap metal cheaply or "donate" money to their subsidiaries or whomever they choose to give to. Whatever they give away, they can get back from their customers.
The interesting point is WHY Kepco decided to "enrich" the buyer of its scrap metal by selling well below the market price. (Kepco says that it sold to the highest bidder, which raises a further question if the whole bidding system might have been rigged.)
It makes more sense to interpret this sale as a political deal. They must have used this scrap metal deal as a way of "legally" paying off someone. If I were an investigative reporter, I would look into who owns the company that bought the scrap metal from Kepco. Is it a Yakuza-owned company? Or is it a company related to a politician? The Japanese Times article merely reprints the press agency reports. Similarly, Mainichi Shimbun (a Japanese language daily) just reports what the tax authorities and Kepco have officially stated. This is very typical of Japanese mainstream media: they merely print what the authorities say or what press agency reports. Japanese journalists often know much more than they let on; but choose to keep the public in the dark.. Two things encourage this type of behavior: money and violence.
The vicious circle or money, violence and silence emboldens the likes of Kepco, Tepco and Yakuzas in Japanese society. And for those who benefit from silence, Japan's power companies are hens that lay golden eggs. Thus the horrible saga just goes on and on in Japan.
