The Foreign Exchange and Foreign Trade Law

SUPPLEMENT - THE 2010 GUIDE TO JAPAN - February 17, 2010

Mori Hamada & Matsumoto

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Marunouchi Park Building 2-6-1 Marunouchi, Chiyoda-ku Tokyo 100-8222 Japan

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In May 2008, the Japanese Ministry of Finance (MOF) and the Ministry of Economy, Trade and Industry (METI), acting pursuant to the Foreign Exchange and Foreign Trade Law (FEFT), ordered The Children's Investment Master Fund (TCI) to halt further acquisition of the shares of electric power wholesaler Electric Power Development (J-Power). Both MOF and METI based their rulings on the grounds that there was a possibility that, through TCI's further acquisition of J-Power's shares, the management of J-Power might be affected. This change in management could then affect the stable supply of electric power and Japan's nuclear and nuclear fuel cycle-related policies. The case appears to be the only instance in which Japanese authorities have issued an order prohibiting investment into a Japanese company. However, it is essential for foreign investors contemplating making an investment into a Japanese company (whether listed on a stock exchange or not) to have an...



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