Tokyo- The Japanese government's wishes were behind Toshiba Corp.'s selection this week of an international consortium led by a Japanese state-backed investment fund as its preferential negotiating partner on the planned sale of its Toshiba Memory Corp. unit.

Before announcing the decision on Wednesday, Toshiba was waiting for an outline of a consortium led by Innovation Network Corp. of Japan to be mapped out under the government's initiative, making its open bidding process on the sale a mere facade.

INCJ did not participate in either the first bidding round in March or the second in May, while continuing behind-the-scenes talks with existing bidders with potential to join the consortium, such as US private-equity firms Kohlberg Kravis Roberts & Co. and Bain Capital.

Concerned about possible leaks of Toshiba's flash memory technology especially to China, the Japanese government initially mentioned the possible use of the foreign exchange law to prevent the Toshiba unit from being sold to Taiwan's Hon Hai Precision Industry Co., which operates in mainland China, or other foreign companies.

Last year, Canon Inc. won the race to acquire Toshiba's medical equipment unit, Toshiba Medical Systems Corp. For the flash memory unit, however, the government saw no bids from major Japanese companies.

The situation left the government with little choice but to mobilize INCJ and another state-affiliated body, the Development Bank of Japan. At the same time, the use of the two bodies has led effectively to a taxpayer-financed bailout of the struggling electronics and machinery maker. (Jiji Press)