Shareholders file 7.2 tril. won damage suit against KEPCO

A group of shareholders of Korea's state-run Korea Electric Power Corp. (KEPCO) has filed a lawsuit against the utility firm, claiming KEPCO suffered massive losses due to its failure to adequately raise electricity prices in a timely manner, industry sources said Monday.

The group claimed KEPCO's failure to raise electricity rates caused 7.2 trillion won ($6.38 billion) in damage to the company between 2009 and 2010.

In August last year, Kim Ssang-su, KEPCO's then president, was also sued by shareholders over damages that they claim stemmed from low electricity rates.

KEPCO, the supplier of almost all of the country's electricity, had been forced to keep its power tariffs at lower levels than production costs as part of a government drive to curb rising inflation in Asia's fourth-largest economy.

The government allowed the utility firm to raise the rates by an average of 4.9 percent in August, the first increase in more than a year, after fuel costs increased.

Currently, the price of electricity only represents about 90.9 percent of production costs in spite of the most recent price hike.

The government said earlier it may continue to raise electricity rates, at least gradually, to bring its prices to nearly 100 percent of costs. (Yonhap)