Horie pleads not guilty

Takafumi Horie, former prexy of Internet startup Livedoor, pleaded not guilty to security law violations on Monday at the start of his trial in Tokyo district court. Horie is accused of falsifying 2004 earnings figures to boost Livedoor’s share price, among other charges.

Four former Livedoor execs arrested on similar charges in January entered guilty pleas at their trials in May.

A member of Horie’s legal defense team, Yasuyuki Takai, called the charges against his client “farfetched” in an interview that aired Sunday on TV Asahi. Instead of arguing that he was simply unaware of his subordinates’ shenanigans, as he earlier told prosecutors, Horie now claims “they did not do these things,” Takai said.

In October 2004 Livedoor group company ValueClick Japan, now Livedoor Marketing, announced it was acquiring publisher MoneyLife in a stock swap. Prosecutors claim that, at the time of the announcement, MoneyLife had already been acquired by ValueClick though an investment partnership. ValueClick was able to boost its stock price through the fake stock swap and, prosecutors charge, funneled profits from the deal to the Livedoor parent company without reporting the transaction to tax authorities.

Horie is suspected of orchestrating this phony sale with the connivance of four former Livedoor execs. As a result, Livedoor was able to overstate its pre-tax profits for the year by ¥5.3 billion ($45.3 million), prosecutors charge.

Prosecutors discovered other financial manipulations that allowed Horie and his team to build Livedoor with blinding speed from an Internet startup, launched in 1996, to a media giant engaged in a dizzying array of businesses.

After Horie’s legal troubles began, Livedoor’s share price plunged, from a height of ¥742 ($6.40) on Jan. 4 to ¥94 (81¢) when the company was delisted from the Tokyo Stock Exchange on April 14.

Among the shareholders suffering massive losses was the Fuji TV web, which sold its 12.75% stake in Livedoor to the prexy of broadband giant Usen in March for about $82 million. It had paid $379 million for the shares in 1995 as part of a deal ending Livedoor’s aggressive takeover bid for a radio company owned by Fuji.

Want Entertainment News First? Sign up for Variety Alerts and Newsletters!
Post A Comment 0