Japan Panel Objects to British Fund’s Bid to Raise J-Power Stake

Tokyo, April 15 (Jiji Press)–A Japanese government panel on Tuesday reached a unanimous conclusion against a British fund’s plan to increase its stake in Electric Power Development Co. , Japan’s largest electricity wholesaler known as J-Power.

A subgroup of the government’s Council on Customs, Tariff, Foreign Exchange and Other Transactions concluded that a higher stake by The Children’s Investment Fund (TCI) may hinder the maintenance of Japan’s public order.

The panel asked the government to take appropriate measures on the bid by TCI to raise its J-Power stake to a maximum 20 pct from the current 9.9 pct.

Based on the recommendation, the government is expected to demand TCI cancel or change its plan.

The panel said that the possibility cannot be ruled out that the bid will give unexpected impacts on the planning, management and maintenance of Japan’s core facilities such as electric power transmission lines as well as on the implementation of its nuclear and nuclear fuel cycle policies.

Japanese law allows the government to recommend or order a foreign company to change or cancel a plan to acquire a stake of 10 pct or higher in electricity companies if the plan is deemed as a threat to public order.

The case has been seen as a test of how open Japan’s markets are to foreign investors since January when TCI filed for government approval of the bid.

The Ministry of Economy, Trade and Industry, which oversees the power industry, has been concerned that a higher stake by TCI will allow the fund to increase its influence over J-Power, thus disrupting stable electricity supply and nuclear power plant construction in Japan.

J-Power owns core power transmission facilities, while planning to build a power plant using spent nuclear fuel in the northern Japan prefecture of Aomori.

To ease concerns, TCI said earlier on Tuesday that it has proposed to the government that it will freeze its voting rights in J-Power by putting shares it would buy into a trust.END

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