Photo/Illutration Protestors display a sign in front of the Osaka District Court on Aug. 1 calling for former executives of Kansai Electric Power Co. to be indicted. (Yusuke Morishita)

OSAKA--A citizens’ prosecution inquest panel has found that three former executives of Kansai Electric Power Co. should be indicted over a major gift and pay scandal, even though prosecutors had dropped their case against them.

The decision by the Osaka No. 2 prosecution inquest panel, which was dated July 7 but announced Aug. 1, means that prosecutors must reopen their cases and investigations to judge if the trio are criminally liable for financial misconduct.

A group of lawyers representing those who requested that the panel examine the cases hailed the panel’s decision as a victory.

“The panel is questioning whether prosecutors had done all they could to uncover all the cases, given that they did not conduct raids (of offices and homes of the suspects) or conduct thorough interviews of those involved,” said Yuichi Kaido, one of the lawyers. “Now, it is time for prosecutors to act.”

The three executives--former President Shigeki Iwane and former chairmen Shosuke Mori and Makoto Yagi--were among nine senior Kansai Electric officials who came within the crosshairs of a special investigation squad with the Osaka District Public Prosecutors Office.

Prosecutors suspected Mori and Yagi committed aggravated breach of trust under the Company Law when they decided to compensate board members for pay cuts they sustained when they retired by letting them assume part-time advisory positions.

The company paid a total of 259 million yen ($1.96 million) to 18 former directors between 2016 and 2019.

The utility reduced their pay following a sharp fall in profits in the aftermath of the 2011 nuclear disaster.

“It was effectively deferred payment of directors’ salaries and renumeration,” the panel said.

The panel also concluded that alongside Mori and Yagi, Iwane should be prosecuted for his suspected role in getting the company to compensate a former vice president who had to pay additional tax after he accepted cash and gifts from a former senior municipal government official in Takahama, Fukui Prefecture. Kansai Electric operates a nuclear plant there.

The panel determined that constituted a special breach of trust under the Company Law and corporate embezzlement, saying the three decided on the arrangement “privately.”

Osaka prosecutors dropped four cases involving Kansai electric officials in November, citing a lack of evidence.

They suspected that many other Kansai Electric senior officials also accepted cash and gifts from the Takahama official. But the panel concluded it was unjust for prosecutors to drop their case against them.

The panel said the KEPCO officials must have realized the Takahama official gave them the money and presents with the expectation of being rewarded in turn, making it possible to establish a bribery case.

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