TCI Lobbies J-Power Investors, Threatens Cross-Shareholders

May 27 2008 | 9:23am ET

The Children’s Investment Fund is opening new fronts in its increasingly acrimonious battle with Japan’s largest electric utility.

The London activist hedge fund said it has won the backing of shareholders owning 8% of Electric Power Development Co., better known as J-Power, and fired a few warning shots in the direction of several cross-shareholders.

TCI said it has bought stakes in both Mizuho, Japan’s second-largest bank, and Kajima, the country’s largest general contractor, both of which are shareholders of J-Power. The hedge fund—which bought stakes of less than 5% in each—said it will seek to hold the two companies accountable for how they vote their shares at J-Power’s annual meeting.

The hedge fund has been battling for what it calls improved corporate governance at J-Power, including strict limits on the controversial practice of cross-shareholding, in which companies buy large stakes in each other. TCI argues that cross-shareholding eats up returns that should be going to investors.

TCI said it has sent letters to Mizuho and Kajima, as well as Nippon Life Insurance Co., seeking meetings about their stance on TCI’s proposed changes at J-Power. None have responded.

The hedge fund, which owns 9.9% of J-Power and recently saw the Japanese government block its effort to double that stake, won a warmer reception from J-Power’s retail investors. TCI met yesterday in Tokyo with about 20 individual investors owning a total of 8% of J-Power, and say they won their support.

TCI’s proposed proxies for the meeting include seven items involving cross-shareholdings, dividends, share buy-backs and outside directors. J-Power has rejected all of TCI’s demands thus far.

RELATED STORIES

TCI Launches J-Power Lobbying Effort
TCI Turns Up The Heat On J-Power Board
Japan Rejects TCI Bid For J-Power
TCI Makes Final Appeal Over J-Power Bid
TCI Request For Bigger Power Co. Stake On The Ropes
Hohn Seeks EU Help In Bid For Japanese Power Co.
TCI Says It’s No Threat To Japanese Security
TCI Seeks Bigger Piece Of Japanese Power Co.


In Depth

Q&A: George Schultze On His Fund's Unique Approach to Distressed Investing

Apr 16 2015 | 1:01am ET

George Schultze is a managing member of Schultze Asset Management, a long/short...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Minnesota Supreme Court Rejects The Ponzi Scheme Presumption: Lenders Claw Back Some Of Their Own Rights

Apr 17 2015 | 9:23am ET

A recent court ruling in Minnesota has put an end to the Ponzi Scheme Presumption...

 

Editor's Note