Japanese government set to reject UK fund's bid for J-Power

05 April 2008

Mumbai: The Japanese government is expected to reject a bid by The Children's Investment Fund (TCI) of the UK to raise its stake in Japan's largest electricity wholesaler, J-Power, on national security grounds, official sources said.

Electric Power Development, known as J-Power, meanwhile, is planning to spend 1 trillion yen ($10 billion) in the next five years beginning April to expand and set up fresh capacity in power and mining projects overseas.

Foreign investors need regulator's approval to buy over 10 per cent stake in Japanese companies which are deemed vital to the country's security and public order.

J-Power's status is  under review as it is the country's largest electric utility and plans to build nuclear power plants.

TCI, which currently holds 9.9 per cent of J-Power, has sought government permission to raise its stake to as much as 20 per cent, at about $630 million at the current market price. 

TCI has warned the Japanese government that it would take the matter to court if rejected.