TOKYO, Sept 27 (Reuters) - Japanese shares fell the most in almost five weeks on Friday after Kansai Electric Power Co Inc revealed payments to executives from an outside individual, at a time the government is calling for improved governance to attract foreign investors.
Shares in Apple Inc supplier Japan Display Inc also tumbled the most in more than three months after a Chinese investor withdrew from an 80 billion yen ($742.46 million) bailout of the smartphone screen maker.
The Nikkei 225 index ended down 0.77% at 21,878.90 after briefly touching its lowest since Sept. 11.
At a hastily arranged news conference on Friday, Kansai Electric President Shigeki Iwane said he and some other executives had received 320 million yen payments from a person outside the company over a period of seven years.
The revelation came after Kyodo news agency reported the deputy mayor of a town hosting a Kansai Electric nuclear power plant had disclosed such payments to tax authorities as a token of appreciation. The deputy mayor has since died, Kyodo said.
"The news about Kansai Electric suggests this problem goes right to the top of the organisation, and this problem could get bigger still," said market analyst Yutaka Masushima at Monex Securities.
"Of course, there is a risk this leads to a decline in trust in Japanese stocks. Trust from overseas investors could fall. We've had other governance problems in the past."
Since taking office in 2012, Prime Minister Shinzo Abe has enacted policies to improve corporate governance to attract more foreign investors. However, the effort suffered a blow last year from an executive pay scandal at Nissan Motor Co Ltd.
For the full week, Nikkei shares fell 0.91% for the steepest weekly decline since Aug. 16, as sentiment for stocks weakened globally due to concerns about the broader market impact of an impeachment probe of U.S. President Donald Trump.
There were 189 decliners on the Nikkei index against 33 advancers on Friday.
The largest percentage losses in the Nikkei 225 index were Kansai Electric at 5.71%, followed by Sumitomo Corp losing 4.60% and Chiba Bank Ltd down by 4.42%.
The largest percentage gainers were Fanuc Corp by 2.23%, followed by Sumco Corp at 1.86% and Advantest Corp up by 1.69%.
The broader Topix ended down 1.17% at 1,604.25.
The volume of shares traded on the Tokyo Stock Exchange's main board was 1.13 billion, versus an average of 1.16 billion yen over the past 30 days. ($1 = 107.7500 yen)
Reporting by Stanley White; Editing by Christopher Cushing