TOKYO — Lawyers for Takafumi Horie, the former president of Internet startup Livedoor, pleaded not guilty Wednesday on his behalf to charges that he violated Japanese securities laws.
Horie’s lawyer Yasuyuki Takai told the press the entrepreneur “was convinced” he had acted within the law after listening to his accountants and other advisers.
At the same time, Horie does not dispute a central fact of the case against him in Tokyo District Court — that the Livedoor group falsely stated a pretax profit of ¥5 billion ($45 million) for the fiscal year through September 2004, even though it actually lost $2.7 million in the same period.
Horie and four Livedoor executives, including former chief financial officer Ryuji Miyauchi and former representative director Fumito Kumagai, were arrested in January on charges of falsely inflating company earnings.
All except Kumagai also are accused of scheming to mislead investors about the 2004 takeover of a publisher by Livedoor Marketing — a Livedoor subsidiary then called ValueClick Japan.
After prosecutors formally submit their evidence on June 7, Horie’s trial is skedded to get under way in mid-July. The court is expected to hand down its ruling by the end of the year. Meanwhile the four other indicted Livedoor execs are reportedly planning to plead guilty when their trial starts on May 26.
A key question in Horie’s trial is whether he was actively involved in planning the stock manipulation scheme or, as his lawyers insists, remained out of the loop.
Once a high-flying Internet powerhouse, Livedoor last year mounted an aggressive takeover bid for a radio company owned by web Fuji TV.
The bid failed, but Fuji ended up buying a 12.75% stake in Livedoor for $396 million.
In March, the web sold its Livedoor shares to broadband giant Usen for about $85.5 million. Livedoor has since been delisted from the Tokyo Stock Exchange.