Kaori Kaneko and Tim Kelly

TOKYO (Reuters) – Japan is not going to block foreign investors purchasing industrial giants like Toshiba Corp (OTC) Corp, provided they adhere to rules that regulate the handling sensitive infrastructure technology.

Takayuki Takashi stated that “economic activity is completely free” when asked by a reporter if the government would interfere in any overseas bid for Toshiba. We respond in accordance to Japanese laws and regulations when security is a concern.

Toshiba is under threat from foreign equity firms. It will prove to be an open test for Japan’s willingness, if it allows one of its existing corporations to come under foreign control.

As tensions rise with China, Japan also increases its oversight over sensitive technology.

Kobayashi spoke out to say Japan hopes to attract foreign investment. Kobayashi cited Fumio Kishhida’s speech this month, which he made to London-based investors and bankers. This was when he laid out plans to make Japan the third-largest country by increasing private sector investment and redistributing wealth.

Toshiba has announced on May 13 that 10 potential buyers had expressed interest in buying the company, which includes nuclear energy and military radar. Sources have indicated that the U.S. private equity companies Bain, Blackstone (NYSE 🙂 and KKR were among those interested in bids.

Toshiba has set up a committee that will examine deals to privatize the company after it was hit by scandals in accounting and governance. A management-backed restructuring plan was rejected by shareholders earlier.

A shareholder-commissioned investigation published a year ago said Toshiba’s managers colluded with Japan’s Ministry of Economy Trade (METI) and Industry to block the influence of foreign stockholders. The METI minister Koichi Haida refused to authorize an investigation into this allegation.