The Children’s Fund has bowed out of Japan at an estimated cost of Y12.5 billion (£80 million), after one of the most acrimonious and drawn-out shareholder battles in Tokyo market history.

The abrupt exit involves the Children’s Investment Master Fund, or TCI, selling its entire 9.9 per cent stake in the Japanese utility, J-Power, back to the company.

The shares were purchased by J-Power for Y3,830 each – a premium over their closing share price on Thursday, but vastly below the original price. TCI is understood to have opened negotiations for the sale of the stake in late July, with the deal completed just under a month ago.

At the direction of its Asia chief, John Ho, TCI attempted to use its hefty stake in J-Power to shake-up management and demand better returns for shareholders. The debate became a hugely embittered showcase for opposing Japanese and western views on corporate governance.

What started as a series of private discussions between Mr Ho and the J-Power board eventually developed into a public battle.

TCI argued that the company was misusing its cash by building cross-shareholdings with other listed firms.

J-Power maintained that it needed to deploy its cash for investment in new electricity production facilities rather than acceding to TCI’s demands for higher dividend.

The stakes in the battle grew even higher earlier this year when TCI unveiled plans to raise its stake in J-Power to 20 per cent - a gambit which prompted the Japanese government to declare that, as a the utility that keeps the lights on in Tokyo, J-Power should be regarded as a strategic asset in which foreign investment should be limited.

In keeping with the high emotions running at the time, TCI issued a statement in July strongly objecting to the government order. “TCI wishes to make it clear that it does not agree with the conclusion or logic used in arriving at the order,” it read, “the decision-making process was flawed by erroneous fact-finding, unsound economic reasoning, misinterpretations of law and a lack of transparency.”

Times Recommends

• Gazprom brands Ukraine 'a barbarian' in gas row
• Services sector raises fears over UK jobless
• Retailers surge as profits survive sales plunge