TCI heeds Japan gov order not to up J-Power stake

Tag : Stand By Power
British activist fund TCI said it willheed the Japanese government's order not to buy more shares inelectricity wholesaler J-Power, closing a chapter in a stand-off seen by some investors as asymbol of the closed nature of Japanese markets.
The Children's Investment Fund had sought permission to raise itsstake in J-Power to 20 percent from 9.9 percent, complying with alaw that requires state approval to acquire more than 10 percent ofa company deemed vital to national security.
But in May the government ruled that TCI could not double itsstake, the first time it had blocked a foreign investor on nationalsecurity grounds. The fund had until Monday to accept the order orappeal.
TCI said in a statement that it did not agree with the government'sdecision, arguing that it is not a threat to the country's securityand accusing the state of a lack of transparency and ofmisinterpreting the law.
The fund said it would continue to push J-Power, whose officialname is Electric Power Development Co, to improve corporategovernance and shareholder returns. It also left open thepossibility of re-applying to boost its stake.
"It is disconcerting that legitimate investors who want to improvecorporate governance of privatized and listed companies can be sohastily characterized as threats to public order," TCI DirectorJohn Ho said in a statement.
The government has countered that it reamins open to foreigninvestment, saying that J-Power was a special case and needed to beprotected from foreign investors out of concern for possibledisruptions to the nation's electricity supply.
The case for limiting TCI's investment also stems from J-Power'splans to build a nuclear power plant in Japan.
There have in fact been 760 cases in the past three years whereforeign investors had to seek approval for investment, and all wereapproved in 30 days, Japan's Ministry of Economy, Trade andIndustry said in May when it issued the order.