• Today, I intend to address the response of Chubu Electric Power and Miraiz to the order from the Japan Fair Trade Commission ("JFTC").
• On April 13, 2021 and October 5, 2021, Chubu Electric Power and Miraiz were subjected to on-site inspections by JFTC on suspicion of violations of the Antimonopoly Act, and since then, both companies have fully cooperated with JFTC's investigations.
• Chubu Electric Power received a surcharge payment order, and Miraiz received a cease and desist order and surcharge payment order, respectively under the Antimonopoly Act from JFTC today in connection with the city gas supply to large-volume customers in the Chubu area.
  Also, Miraiz received a warning concerning the city gas supply for residential use in the Chubu area, and Miraiz and its subsidiary, Cenergy Co. received a warning concerning the supply of liquefied natural gas in Aichi, Gifu, and Mie prefectures respectively from JFTC.
  
• With regard to the city gas supply to large-volume customers in the Chubu area for which Miraiz received an order, an internal investigation was conducted in response to an on-site inspection on October 5, 2021 by JFTC. As a result, it was confirmed that two specific executives and employees of the gas business division at the head office had been conducting acts that were suspected of order coordination in some projects with executives and employees of Toho Gas Co. Ltd. Based on the above facts, we filed an application for the surcharge payment reduction and exemption and have since been fully cooperating with the investigation by JFTC.
• At a meeting of the Board of Directors held today, Chubu Electric Power and Miraiz decided not to file a lawsuit to rescind the cease and desist order and the surcharge payment order, based on the explanation provided by JFTC on the date of the opinion hearing.
  As for the warning, the companies were warned to prevent similar actions from being taken in the future, on suspicion of violating the Antimonopoly Act.
  
• We take very seriously the fact of having received the orders and warnings from JFTC.
• We sincerely apologize to our customers, shareholders, local communities, business partners, and other stakeholders for the inconvenience and concern we have caused, as well as the loss of trust in us due to our violation of the Antimonopoly Act.
• To those customers who are subject to the cease and desist order and surcharge payment orders, we would like to explain the details of the orders we have received and apologize individually for the fact that we have been judged to have violated the Antimonopoly Act in our sales activities and for the inconvenience and concern we have caused as well as the loss of trust from customers.
• I will now discuss measures to strengthen compliance enforcement measures.
• Chubu Electric Power and Miraiz took seriously the suspicions raised by JFTC regarding several incidents, and on April 7, 2023, announced a thorough compliance program designed to ensure that we would never again be suspected of violating the Antimonopoly Act.
  In response to today's orders, etc., from JFTC, and in order to prevent recurrence, the Board of Directors of Chubu Electric Power and Miraiz decided on Reinforcement Measures for thorough compliance measures at a meeting held today. Reinforcement Measures were compiled based on advice we received from attorneys specializing in Antimonopoly Act, Companies Act, and crisis management.
  
• There are three key points of Reinforcement Measures. The first is the establishment of Compliance Headquarters and related divisions as well as the establishment of a dedicated organization for legal risk management at Chubu Electric Power. The second is to review the organization, strengthen and expand training in Miraiz, and the third is to tighten contact with competitors.
• From now on, in addition to thorough compliance measures, we will work on Reinforcement Measures to ensure that no violation of the Antimonopoly Act will ever occur again and that we will never be suspected of such a violation.
• Next, I will discuss the reduction of executive compensation and instructions to directors.
• Chubu Electric Power and Miraiz have violated the Antimonopoly Act, thereby undermining the trust of its customers, shareholders, local communities, business partners, and other stakeholders, and causing inconvenience and concern. Taking this into consideration, the Board of Directors has decided at a meeting held today on the reductions in executive compensation, etc.
• With respect to the reduction of executive compensation, we take the orders and warnings seriously and will reduce the compensation of all representative directors who are currently responsible for management on behalf of Chubu Electric Power and Miraiz in order to further ensure compliance with the Antimonopoly Act and other regulations.
  We have also instructed all directors of Chubu Electric Power and Miraiz to take thorough measures to prevent recurrence so that they will never again receive such an order or warning.
• We sincerely apologize to our customers, shareholders, local residents, business partners, and other stakeholders for any inconvenience or concern this may cause.
• In order to ensure that we are never again subjected to such an order or warning, I will lead the Chubu Electric Power Group in a concerted effort to further ensure compliance with the Antimonopoly Act and other laws.
• This ends my presentation.
  
  

Resource

Receipt of Cease and Desist Order, Surcharge Payment Order, etc. from JFTC for City Gas Supply to Large Volume Customers in Chubu Area (March 04, 2024 Press Release)
Reduction of Executive Compensation and Instructions to Directors (March 04, 2024 Press Release)