Identifier
Created
Classification
Origin
08TOKYO1950
2008-07-15 06:26:00
CONFIDENTIAL
Embassy Tokyo
Cable title:
TCI HOISTS THE WHITE FLAG IN J-POWER CASE
how-toVZCZCXRO6965 PP RUEHFK RUEHGH RUEHKSO DE RUEHKO #1950 1970626 ZNY CCCCC ZZH P 150626Z JUL 08 FM AMEMBASSY TOKYO TO RUEHC/SECSTATE WASHDC PRIORITY 5835 INFO RUEHLO/AMEMBASSY LONDON 2109 RUEHFR/AMEMBASSY PARIS 6188 RUEHUL/AMEMBASSY SEOUL 0358 RUEHGP/AMEMBASSY SINGAPORE 7185 RUEHBJ/AMEMBASSY BEIJING 4368 RUEHFT/AMCONSUL FRANKFURT 0506 RUEHFK/AMCONSUL FUKUOKA 8854 RUEHGH/AMCONSUL SHANGHAI 0445 RUEHKSO/AMCONSUL SAPPORO 9437 RUEHHK/AMCONSUL HONG KONG 6550 RUEHBS/USEU BRUSSELS RUEATRS/TREASURY DEPT WASHDC RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RHEHAAA/NSC WASHDC
C O N F I D E N T I A L TOKYO 001950
SIPDIS
DEPT FOR EAP/J AND EEB/OIA
DEPT PASS USTR FOR CUTLER AND BEEMAN
TREASURY DEPT FOR DAS NOVA DALY, AND IA/CARNES
USDOC FOR 4410/ITA/MAC/OJ
NSC FOR TONG
E.O. 12958: DECL: 07/15/2013
TAGS: EINV ENRG PGOV OECD JA
SUBJECT: TCI HOISTS THE WHITE FLAG IN J-POWER CASE
REF: A. TOKYO 1337
B. TOKYO 1550
Classified By: CDA Robert F. Cekuta, Reason 1.4 (b)(d)
C O N F I D E N T I A L TOKYO 001950
SIPDIS
DEPT FOR EAP/J AND EEB/OIA
DEPT PASS USTR FOR CUTLER AND BEEMAN
TREASURY DEPT FOR DAS NOVA DALY, AND IA/CARNES
USDOC FOR 4410/ITA/MAC/OJ
NSC FOR TONG
E.O. 12958: DECL: 07/15/2013
TAGS: EINV ENRG PGOV OECD JA
SUBJECT: TCI HOISTS THE WHITE FLAG IN J-POWER CASE
REF: A. TOKYO 1337
B. TOKYO 1550
Classified By: CDA Robert F. Cekuta, Reason 1.4 (b)(d)
1. (SBU) The Children's Investment Master Fund (TCI),a U.K.
hedge fund, announced July 14 it will not contest the GOJ's
May 13 order directing it to halt plans to boost its stake in
electricity wholesaler Electric Power Development Company
(J-Power) (Ref A). The fund's decision ends a highly
contentious eight-month battle, which for many institutional
investors had become a test case of the continued openness of
Japan's investment climate.
2. (U) In a July 14 statement, TCI again criticized the lack
of transparency in the GOJ's decision making process and said
it "wishes to make clear that it does not agree with the
conclusion or the logic" of the GOJ's decision. However, the
statement continued, "it is not in the interests of any of
the parties to this case to pursue an appeal" in the courts,
which is TCI's only remaining option to overturn the
government's decision.
3. (SBU) In addition to the time and expense of a legal
challenge, TCI's decision to give up the fight reflects a
failure to gain support from fellow investors for its
shareholder proposals at J-Power's June 26 annual general
shareholders meeting. TCI had called for J-Power management
to raise the firm's annual dividend and to set a limit on the
amount of cross-shareholdings in other listed firms (Ref B).
4. (C) Comment: TCI's statement is seen in Tokyo as largely
anti-climatic. The likelihood Japan's courts would have
overturned the GOJ's order was always a long shot. Observers
argue the outcome is unlikely to have a significant impact on
Japan's future inward investment flows, despite the
substantial international attention the case generated.
Still, while the GOJ, and especially METI, sought to argue
the TCI case was unique and involved sensitive Japanese
national security concerns, it nonetheless has given foreign
and domestic observers reason to question the depth of the
GOJ's commitment to expanding foreign investment in Japan.
Cekuta
SIPDIS
DEPT FOR EAP/J AND EEB/OIA
DEPT PASS USTR FOR CUTLER AND BEEMAN
TREASURY DEPT FOR DAS NOVA DALY, AND IA/CARNES
USDOC FOR 4410/ITA/MAC/OJ
NSC FOR TONG
E.O. 12958: DECL: 07/15/2013
TAGS: EINV ENRG PGOV OECD JA
SUBJECT: TCI HOISTS THE WHITE FLAG IN J-POWER CASE
REF: A. TOKYO 1337
B. TOKYO 1550
Classified By: CDA Robert F. Cekuta, Reason 1.4 (b)(d)
1. (SBU) The Children's Investment Master Fund (TCI),a U.K.
hedge fund, announced July 14 it will not contest the GOJ's
May 13 order directing it to halt plans to boost its stake in
electricity wholesaler Electric Power Development Company
(J-Power) (Ref A). The fund's decision ends a highly
contentious eight-month battle, which for many institutional
investors had become a test case of the continued openness of
Japan's investment climate.
2. (U) In a July 14 statement, TCI again criticized the lack
of transparency in the GOJ's decision making process and said
it "wishes to make clear that it does not agree with the
conclusion or the logic" of the GOJ's decision. However, the
statement continued, "it is not in the interests of any of
the parties to this case to pursue an appeal" in the courts,
which is TCI's only remaining option to overturn the
government's decision.
3. (SBU) In addition to the time and expense of a legal
challenge, TCI's decision to give up the fight reflects a
failure to gain support from fellow investors for its
shareholder proposals at J-Power's June 26 annual general
shareholders meeting. TCI had called for J-Power management
to raise the firm's annual dividend and to set a limit on the
amount of cross-shareholdings in other listed firms (Ref B).
4. (C) Comment: TCI's statement is seen in Tokyo as largely
anti-climatic. The likelihood Japan's courts would have
overturned the GOJ's order was always a long shot. Observers
argue the outcome is unlikely to have a significant impact on
Japan's future inward investment flows, despite the
substantial international attention the case generated.
Still, while the GOJ, and especially METI, sought to argue
the TCI case was unique and involved sensitive Japanese
national security concerns, it nonetheless has given foreign
and domestic observers reason to question the depth of the
GOJ's commitment to expanding foreign investment in Japan.
Cekuta