Govt-backed fund may take minority stake in Toshiba unit

TOKYO: A state-backed fund may invest in Toshiba Corp’s memory chip business as a minority partner — a move that would help the government prevent a sale to bidders it deems risky to national security, said sources.

Discussions on a potential investment were, however, at a very early stage and might not develop further as some people within the government were concerned it could be seen as a publicly funded bailout, said one of the sources.

If the fund, the Innovation Network Corporation of Japan (INCJ), teamed up with a bidder, that would give the suitor a major advantage as it would represent a government stamp of approval, said the sources.

Trade Minister Hiroshige Seko has said the ministry, which oversees INCJ, has no plans to rescue Toshiba.

Toshiba said it would not comment on specifics of the sale process. Chief executive Satoshi Tsunakawa said on Tuesday, however, it would take national security concerns into account.

Separately, a source said the government-backed Development Bank of Japan would be willing to lend support. It was not immediately clear what form that support would take. Reuters