(The following story by Helen Power appeared at Telegraph.co.uk on February 25.)
LONDON — Christopher Hohn, the activist hedge fund manager who is one of Britain’s biggest charitable donors, is facing a loss of tens of millions of pounds after a major punt on the Japanese electricity market turned sour.
TCI, short for The Children’s Investment Fund (it gives 1 per cent of its annual profits to a children’s charity run by the Hohn’s wife) is embroiled in a row with the Japanese government over an investment in JPower, a large Japanese utility.
The activist fund bought a 9.9 per cent stake in JPower last year and has been publicly agitating for increased dividends, which would boost the share price, potentially helping Hohn to make a killing. But the company said it cannot afford to do that because the price of electricity is being kept low by Japanese regulators.
Hohn has already seen an estimated $120m (£61m) wiped off JPower’s share price because the Japanese stock market has fallen in the wake of the credit crunch.
Last week TCI asked the Japanese government for permission to up its stake to 20 per cent, seemingly in the hope of getting more leverage to insist on a dividend hike.
But last week the Government, which can veto some acquisitions by foreign investors if deemed to be a national threat, said it needed until May to decide. Usually it takes 30 days to respond and TCI has threatened to sue the government.