The Liberal Democratic Party’s “project team for the provision of capital funds to corporations” has put together a proposal for the Japanese government. The proposal is intended to support Japanese companies that are cash-strapped due to the new coronavirus outbreak. Revealed on May 18, the proposal states that “capital support should be considered to safeguard companies that possess technology indispensable for Japan from the perspective of economic security.” This is to prevent foreign acquisition of financially weakened Japanese companies.
The proposal states that “it is necessary to secure additional capital in excess of a minimum of 10 trillion yen, including capital funds” for both big businesses and small and mid-sized businesses. The LDP recommendation also proposes the establishment of a new scheme to enable businesses impacted by the coronavirus to recover. This scheme is tentatively named the “fund to overcome the new coronavirus crisis.” The proposal is to be included in the LDP’s economic measures, which will be formulated shortly. At a May 11 press conference, LDP Policy Council Chairperson Fumio Kishida emphasized the importance of providing capital funds, saying that “companies need to secure cash, but if they take on too much debt, they will not be able to raise funds for ordinary operations.” Kishida said that “It is expected that foreign companies will move to acquire [Japanese companies]” so the “infusion of capital to block” such moves should be considered.