The Children's Investment Fund (TCI) defied a government request Friday to drop its bid to raise its 9.9 percent stake in Electric Power Development Co., known as J-Power, to 20 percent.
Last week, the government rejected the U.K.-based hedge fund's bid to double its stake in Japan's biggest power wholesaler, citing national security concerns. The fund said in a statement Friday that the government's decision was based on false premises and factually erroneous information, and that its review process "lacked transparency."
In a case that has raised concerns in the market about Japan's commitment to open markets, the government warned that TCI might pressure J-Power to reduce capital spending, threatening its ability to maintain stable electricity supplies and the operation of a nuclear power plant planned for construction in Oma, Aomori Prefecture.