By Makiko Yamazaki and Yuka Obayashi
TOKYO (Reuters) – A climate activist group on Wednesday lodged a complaint with the Singapore Exchange (SGX) over JERA Co Inc, saying Japan’s biggest power generator did not fully disclose risks related to its $300 million bond issue on the exchange last year.
The complaint, filed by Australia’s Market Forces to the SGX whistleblower office, reflects growing scrutiny by climate activists on financial disclosures in the energy industry.
The group asked the SGX to investigate JERA’s prospectus for the dollar-denominated five-year bond, saying that the company’s disclosure of systemic risks over investments in liquefied natural gas (LNG) “is severely lacking.”
In response to questions about the SGX complaint, a JERA spokesperson said the company was looking into the matter.
It specifically criticised JERA’s description of the impact of the war in Ukraine on the LNG business.
Moscow’s invasion of Ukraine – which it calls a “special operation” – has highlighted energy security risks worldwide, disrupted global fuel supply chains and boosted fuel import costs to Japanese power utilities.
Also missing in the 91-page prospectus were litigation in Australia and business plans to manage a potentially rapid shift to renewable energy from fossil fuels, it said.
“These omissions are material given JERA’s significant exposure to the LNG industry and the transition risks facing that industry, as well as the financial impact litigation can and is having on key JERA projects,” Market Forces said. “Unless these omissions are corrected, investors will be unable to make an informed assessment of JERA’s expected financial performance.”
Market Forces did not invest in JERA bonds, but decided to take the step, as the SGX’s whistleblower system is open to general public, it said.
JERA, a joint venture between Tokyo Electric Power and Chubu Electric Power, has capacity equivalent to an about third of Japan’s thermal power generation output and is one of the world’s biggest LNG buyers.
The complaint comes nearly a year after Market Forces and four other groups jointly urged Tokyo Electric and Chubu Electric to improve climate-related risk disclosures at their respective annual shareholders meetings.
(Reporting by Makiko Yamazaki)
