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26 May 2006 09:19
Former executives of Japan’s once-high-flying internet firm Livedoor admitted on Friday to fraud allegations as they went on trial for a scandal that rocked Japan’s financial and political circles.
The four executives, once known for their casual dress and brash ways, wore dark suits and looked humbly at the ground as prosecutors read charges of hiding financial losses.
“In principle, I acknowledge that the facts in the indictment are correct,” Ryoji Miyauchi, Livedoor’s 38-year-old former chief financial officer, told the Tokyo District Court.
“I am examining myself over the crime I have committed. I feel very sorry for causing trouble to many people,” he said.
The three other executives—Fumito Kumagai, Fumito Okamoto and Osanari Nakamura—also admitted all or part of the charges.
However, two accountants who are also on trial denied they cooked the books.
The former top executives are expected to allege wrongdoing by Livedoor’s flamboyant founder, Takafumi Horie, whose trial is expected in July.
Horie, who less than a year ago ran for Parliament with the blessing of Prime Minister Junichiro Koizumi, has maintained his innocence.
The spiky-haired 33-year-old used to be a media darling for mounting aggressive, albeit unsuccessful, takeover bids and showing up at Japan’s formal corporate boardrooms in a T-shirt.
Prosecutors said the four executives on trial on Friday “conspired” with Horie and falsely reported 5,03-billion yen ($45-million) in pre-tax profit for the year to September 2004 to hide actual losses of about 300-million yen at the company.
The last time much of Japan saw Miyauchi was in television footage of a company holiday party where he danced half-naked on a stage with Horie at a time when Livedoor seemed unbeatable.
One month later, Miyauchi and the other executives were arrested.
The scandal briefly sent the Tokyo Stock Exchange into freefall, at one stage forcing it to close early for the first time.
Miyauchi, Okamoto and Nakamura have also been charged with alleged manipulation of stock prices in conspiracy with Horie.
Horie, however, has denied the charges.
Horie, who once said money could buy him anything, was released last month on 300-million yen bail after spending three months in jail.
The chubby young entrepreneur built one of Japan’s top internet empires by buying up companies in everything from financial services to real estate, publishing and even an auto dealer.
He tried to take over the nation’s most-watched TV network and to buy a baseball team.
Horie has been keeping a low profile since his release on bail, in stark contrast to the days when he was a regular on television quiz shows and the celebrity circuit, often with a model on his arm.
Livedoor, which has appointed new executives who are older and more conservative, was delisted from the Tokyo Stock Exchange in April. It has been sued by shareholders of one of its subsidiaries over damages to its business due to the fraud charges.
About 1 500 shareholders of Livedoor are separately preparing another lawsuit against Horie to seek about six billion yen in damages.
Livedoor, whose market capitalisation plunged to about 100-billion yen from a peak of 900-billion yen, has survived by forming a business alliance with cable broadcaster Usen, which is reportedly considering a full takeover of the embattled firm.—Sapa-AFP
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