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TEPCO to sell KDDI stake to raise funds for compensation

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© 2011 AFP

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In a company statement, the embattled power firm said it would sell 357,541 shares in KDDI

what about remaining 2459 shares? lost or destroyed by tsunami or keeping it as souvenir? seems like good business among KDDI/TEPCO/GOVT whereas people in the region are left in cold.

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Good Good. Keep the liquidation going. Everything must go!!!! oh HAPPY DAY!!

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Son should buy them up at a discount.

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They gotta sell a lot more of their assets than that.

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Is this why KDDI got the rights to sell iPhones in Japan??

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A perfect example of why the Japan Inc. model of inter-holdings is broken and will keep companies there from being competitive going forward -- on several levels. First off, Tepco should have invested that $2.0 billion in its own business, like in additional safety measures for plants like Fukushima, instead of KDDI stock. And because it didn't, the country is now in the midst of the world's second worst-ever nuclear disaster. (Kind of makes Tepco's argument that it could not afford those measures moot.) Second, investors don't buy shares of Tepco because they want to invest in KDDI. If they wanted KDDI stock they'd buy it, or a mutual fund that holds it. These inter-holdings mask the true perfomances of Japanese companies in regards return on capital, and will limit the country's ability to attract foreign investors as a result. Finally, when these investments go south, as happened with Olympus, the earnings of the company are hurt dramatically. Which, again, makes investing in Japanese companies much riskier due to this lack of transparency.

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Just one note of caution - it isn't exactly clear why Tepco hold so much of KDDi stock - are they in a joint venture? Normally when firms hold such large positions it is part of their pension funds - if they are selling the pension fund to fund compensation then they are breaking the law. Anyone know what their portfolio is? Can't see on their balance sheet, but 3bio USD in stocks and bonds?.

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The atomic crisis, which has seen radiation leaking into the air, sea and food chain, has not in itself claimed any lives

This is simply not true. Several liquidators died after sever exposure at the plant.

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Wow.... look how rich TEPCO. How many stakes do they own in other big companies. And yet the government will give them 900 Billion Yen to help them compensate victims. 900 billion comes from the tax payers. Let TEPCO shoulder all and clean their poor safety manangement of their nuke plants.

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This liquidation of assets is peanuts, the real cost of compensation, if it wasn't going to be paid at 1cent on the dollar, is truly gigantic and should be shouldered, at least in part, by the users of the product itself - electricity. A solidarity levy perhaps?

The Fukushima plants generated electricity for Tokyo, but were deemed too risky to build in Tokyo's environs. They named them 'Fukushima' which means everything that comes from the prefecture will be tainted by association forever. No one in Tokyo gave a damn as long as the lights stayed on and you got to keep all your electrical appliances running until hotspots started popping up - meanwhile the rural people got what they deserved I guess for not abandoning their beautiful villages and heading for the 'lights' of the big city.

A moment of reflection in the big smoke - while up here we have to clean up the capital's #!@ big cloud of poison.

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@miyagidad - nice post.

This liquidation of assets is peanuts, the real cost of compensation, if it wasn't going to be paid at 1cent on the dollar, is truly gigantic and should be shouldered, at least in part, by the users of the product itself - electricity. A solidarity levy perhaps?

I think it will be shared, but not just Tepco consumers, it will be all taxpayers.

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Second, investors don't buy shares of Tepco because they want to invest in KDDI. If they wanted KDDI stock they'd buy it, or a mutual fund that holds it.

Point 1: Past investors did not buy shares of TEPCO because they had shares of KDDI.

Point 2: Due to the deregulation of telecommunication established in 1985, many electric power companies including TEPCO started to establish subsidiaries (PNJ Group) to penetrate the market.

Point 3: Companies like KDDI started to buy these PNJ Groups including POWERDCOM Inc. from TEPCO.

Point 4: The merger of POWERDCOM and KDDI resulted in TEPCO obtaining KDDI shares.

Now it's sold for cash.

End of story.

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