A senior executive of the Children's Investment Fund Management LLP (TCI), a British investment fund and the largest shareholder of Electric Power Development Co., urged the utility Friday to stop cross-shareholding and increase investment in fast-growing emerging economies.

John Ho, director of TCI Asia, spoke the day after the investment fund submitted a 127-page business plan to the utility, better known as J-Power. TCI's plan calls for the company to increase its business efficiency and, in turn, raise dividends.

It is the latest proposal by TCI, a well-known activist shareholder, which announced in January its intention to raise its stake in J-Power from the current 9.9 percent to 20 percent.

Foreign investors seeking a stake of more than 10 percent in sectors designated vital to national security, including utilities, must first secure government approval.

The Ministry of Trade, Economy and Industry is currently examining TCI's request. Whether the government gives the green light to TCI is seen as a test of Japan's willingness to open up to foreign investors in such sectors.

Ho pointed out that although Japan is the world's second-largest economy, ordinary people don't have the feeling they have much wealth.

"If it hasn't gone to shareholders, if it hasn't gone to employees, where has it gone?" Ho asked.

He said companies, including J-Power, are using their capital on inefficient investments, including cross-shareholding, instead of returning profits to shareholders and employees or investing in high-growth BRIC economies — Brazil, Russia, India and China.

"Cross-shareholding has only one purpose today," he said. "That is to entrench existing management."

TCI has yet to receive a response from J-Power, Ho said.