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Japan's disgraced Internet guru Horie indicted

Posted by inet - 2006-02-14

Takafumi Horie, the flamboyant founder of Japan's Livedoor Internet firm, was indicted with three associates for alleged securities fraud to cap a spectacular fall from grace.
Horie, 33, who just a month ago was one of Japan's most high-profile business leaders, and his fellow former executives each risk five years in prison and fines of up to five million yen (42,500 dollars).

"During the court proceedings, we will clarify that the key to Livedoor's rapid growth was criminal acts that interfered with fair trade in securities," the Tokyo District Prosecutors Office said in a statement on Monday.

Horie, who has been held in jail without charge since January 23, is due to have his detention extended as prosecutors probe allegations Livedoor lied about its earnings during its meteoric rise from nowhere to market favourite.

The prosecutors office said it filed charges over alleged violations of the securities and exchange law against Horie, his three business partners, Livedoor itself and its affiliate Livedoor Marketing.

The accused, "with purposes to trade securities as well as to influence the securities market, formulated plans to entrap others and distributed false information," said a statement from the prosecutors office.

"We have full confidence in proving the case.

"This case is only a start. We will continue to work with the Securities and Exchange Surveillance Commission to thoroughly investigate the entire case," the statement said.

The commission filed a complaint Friday alleging that Livedoor Marketing released false information in the purchase of a publishing firm in 2004.

Horie reportedly denied the allegations, saying he did not know financial detatils of what was happening at his firm.

"I want to accurately portray my side of the story in court," Horie told investigators, according to the online editions of the Yomiuri and Mainichi newspapers.

Prosecutors, however, have discovered evidence that he sent an e-mail ordering a subordinate to help make Livedoor Marketing appear as if it were profitable, the online Mainichi said.

It has taken prosecutors nearly a month to outline charges against Horie but a steady stream of leaks to the media have all but destroyed his reputation and briefly sent the stock market into chaos last month.

Horie, who would famously negotiate with men in suits while wearing a tee-shirt, launched high-publicity, albeit ultimately unsuccessful, bids to acquire a baseball team and Japan's best-watched television network.

He also ran for parliament in September's general election with the blessing, but not on the ticket, of Prime Minister Junichiro Koizumi.

Horie resigned from Livedoor after his arrest and the company he founded appointed a new management team headed by Kozo Hiramatsu, a 60-year-old who prefers suits to tee-shirts.

Livedoor, under the new leadership but slapped with charges, said it has yet to decide what to do.

"We have not received any communication from the prosecutors office. We will decide the course of our plans after we receive it," said a Livedoor spokeswoman.

Livedoor shares lost another third of their value Monday, tumbling 30 yen to close at 61. The stock traded at more than 700 yen in December.

Kyodo News reported last week that Horie spends much of his time reading an encyclopedia in his jail cell, a far cry from the glitzy Roppongi Hills complex where he once worked, lived and partied.

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