Singapore Exchange Receives Whistleblower Complaint on Japan Largest Power Company JERA for Failure to Disclose Critical Information on Financial & Legal Risks for $300 Million 3.665% Bond Issued in April 2022, Risks of LNG, Australia Lawsuit for Major Gas Project, 10% Stake in Indonesian Power Company Facing Corruption Allegations Since 2019
16th February 2023 | Hong Kong
Singapore Exchange (SGX) has received a whistleblower complaint on Japan largest power company JERA for failure to disclose critical information on financial & legal risks for the $300 million 3.665% bond issued in April 2022, including risks of LNG (Liquified Natural Gas), Australia lawsuit for major gas project (Australian Indigenous Tiwi Islanders), 10% stake in Indonesian power company facing corruption allegations since 2019 (PT Cirebon Energi Prasarana and its Cirebon coal power plant contractor), and insufficient information to achieve Net Zero emissions by 2025. The complaint was lodged by Market Forces, an environmental finance organisation (15/2/23). JERA is the largest power generation company in Japan producing about 30% of Japan’s electricity. JERA is a joint venture between TEPCO FP and Chubu Electric Power Company. Complaint to Singapore Exchange SGX: JERA CO. Inc. (JERA) has omitted information and failed to provide sufficient detail to enable investors to understand and appreciate the risks associated with investing in the company’s U.S. dollar bond issued on the Singapore Exchange on April 14, 2022 (Bond). As such, the Singapore Exchange (SGX) must investigate whether JERA is in violation of the Securities and Futures Act and the SGX Rulebooks … … Unless these omissions are corrected, investors will be unable to make an informed assessment of JERA’s expected financial performance. We, therefore, urge the SGX to investigate the case and take appropriate action. See below for Market Forces statement | View Whistleblower Complaint to SGX
“ Singapore Exchange Receives Whistleblower Complaint on Japan Largest Power Company JERA for Failure to Disclose Critical Information on Financial & Legal Risks for $300 Million 3.665% Bond Issued in April 2022, Risks of LNG, Australia Lawsuit for Major Gas Project, 10% Stake in Indonesian Power Company Facing Corruption Allegations Since 2019 “
Dr. Sachiko Suzuki, Japan Senior Climate Finance Analyst, Market Forces: “It is of grave concern that JERA has failed to disclose key financial and legal risks on its fossil gas investments while attempting to raise hundreds of millions of dollars. There are clear duties of disclosure under the rules of the Singapore Exchange and JERA has been fooling investors by providing just part of the picture of the risks associated with its dirty dealings on fossil fuels … … JERA has failed to disclose major legal risks, with litigation underway in Japan and Australia relating to a new coal power project outside Tokyo and the Australian Barossa gas field opposed by Tiwi Islands First Nations leaders. It’s vital that JERA comes clean with investors and is held to account for hiding the growing risks posed by its investments in fossil fuels.”
JERA is the largest power generation company in Japan producing about 30% of Japan’s electricity. JERA is a joint venture between TEPCO FP and Chubu Electric Power Company.
Market Forces believes that the banks, superannuation funds and governments that have custody of our money should use it to protect not damage our environment. Our work exposes the institutions that are financing environmentally destructive projects and help Australians hold these institutions accountable. We work with the community to prevent investment in projects that would harm the environment and drive global warming. Market Forces was launched in January 2013.
Singapore Exchange Receives Whistleblower Complaint on Japan Largest Power Company JERA for Failure to Disclose Critical Information on Financial & Legal Risks for $300 Million 3.665% Bond Issued in April 2022
- Japan’s largest power company JERA faces complaint for failing to disclose fossil fuel risks
15th Feb 2023 – A complaint has been lodged with the Singapore Exchange outlining how Japan’s largest power company JERA has failed to disclose critical information on financial and legal risks in relation to a US$300 million bond issued in April 2022.
The complaint by environmental finance organisation, Market Forces, highlights that JERA has omitted key information about the risks of investing in Liquified Natural Gas (LNG), when the Russia-Ukraine war has increased LNG price volatility and global climate goals are accelerating the transition from fossil fuels to renewable energy.
Formally lodged to the Singapore Exchange Whistleblower Office, the complaint also highlights a serious failure to disclose legal action by Australian Indigenous Tiwi Islanders over a major gas project, which could have a material effect on JERA’s financial prospects.
The complaint outlines that the fossil fuel industry, including LNG, is prone to risks including major geopolitical events and climate change. JERA has omitted material details from its public disclosures regarding key risks faced by its LNG business.
JERA has also failed to produce an analysis demonstrating the risks and its alignment with decarbonising on a pathway to net zero emissions by 2025. JERA’s omissions deny investors sufficient information to form a full and proper understanding of the Japanese power giant’s business, financial conditions and prospects.
JERA’s lack of transparency has been of mounting concern over recent years. JERA has a 10 per cent stake in Indonesian power company, PT Cirebon Energi Prasarana and its Cirebon coal power plant contractor has been facing corruption allegations since 2019. Yet JERA has not communicated with investors on how the company plans to mitigate this type of risk.
Dr. Sachiko Suzuki, Japan Senior Climate Finance Analyst, Market Forces: “It is of grave concern that JERA has failed to disclose key financial and legal risks on its fossil gas investments while attempting to raise hundreds of millions of dollars. There are clear duties of disclosure under the rules of the Singapore Exchange and JERA has been fooling investors by providing just part of the picture of the risks associated with its dirty dealings on fossil fuels … … JERA has failed to disclose major legal risks, with litigation underway in Japan and Australia relating to a new coal power project outside Tokyo and the Australian Barossa gas field opposed by Tiwi Islands First Nations leaders. It’s vital that JERA comes clean with investors and is held to account for hiding the growing risks posed by its investments in fossil fuels.”
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