Bloomberg – Japan issued a final order to Children’s Investment Fund Management (UK) LLP to drop a bid to double its stake in J-Power, rejecting a last-ditch appeal from the U.K. hedge fund.
Japan’s central bank today handed a letter from the finance and trade ministries to the $10 billion fund, known as TCI, ordering it to withdraw the request to double its 9.9 percent stake in Electric Power Development Co., according to a statement released in Tokyo.
The order marks the first time Japan has invoked a national security law to block overseas acquisitions of more than 10 percent in companies in certain vital industries, including arms makers and utilities. The move comes at a time foreign investors, including California Public Employees’ Retirement System, are set to ask Japanese companies to improve overall corporate governance.
“TCI has never indicated clear plans how to avert an adverse impact on J-Power’s nuclear-plant project, such as a major delay or cancellation,” Keiichi Kawakami, director of the trade promotion division at the trade ministry, told reporters.
TCI has until July 14 to notify the government if it intends to pursue the matter in court, Kawakami said.
“There has been no engagement on our submission and there are no clear reasons to reject us,” John Ho, Hong Kong-based head of TCI’s Asian division, said by phone today before the announcement. `We will take it step by step.”
