Former Livedoor president jailed for fraud
Speaking on a Sunday talkshow, former Livedoor prexy Takafumi Horie maintained his innocence of the charges of securities fraud that resulted in a 2½-year prison sentence from Tokyo District Court on Friday.
“I did not intentionally try to pad earnings and there was no false accounting,” Horie said on the TV Asahi web “Sunday Project” show. Noting that he has lost his job, his salary and spent time in prison, Horie rejected the suggestion that he apologize for his alleged misdeeds. “That would be inconsistent with my assertions,” he explained.
Asked how he felt the moment the verdict was announced, Horie said “Everything went black — even though I hadn’t done (what they said I did) I felt as though I had done something — something bad.”
Once the prexy of Internet portal Livedoor, Horie was found guilty of conspiring with other execs to phony profit numbers with the aim of boosting Livedoor’s stock price.
Horie pleaded not guilty in September at the start of the widely covered case — an unusual move in the Japanese justice system, where defendants in white collar crime cases commonly enter guilty pleas to avoid prison time.
Horie started the company that was to become Livedoor in 1996. Through a strategy of aggressive acquisitions and stock splits Horie built Livedoor into an Internet powerhouse and stock market darling, driving its value in the stratosphere and his own stake to $1 billion by January 2006.
Early in 2005 Horie led a takeover attempt on radio broadcaster Nippon Broadcasting as a prelim to wresting control of parent company Fuji TV. The attempt failed, but the web bought a 12.7% stake in Livedoor, worth 44 billion yen ($372 million), in the spring of 2005 as part of a peace pact with Horie. Following Horie’s arrest, however, Livedoor’s stock price tanked and Fuji took a Y34.5 billion ($292 million) loss. The web now plans to sue Livedoor for damages. Livedoor also faces suits from shareholders angered by the evaporation of their earnings.
Prosecutors requested a four-year sentence for Horie for his violations of Japanese security laws. In their closing statement in Tokyo District Court on December 22, prosecutors noted Horie’s “ill-logical, unnatural” claims of innocence. “Instead he has try pass off responsibility to his subordinates, but the testimony of the company’s executives provide ample proof of his crimes,” prosecutors claimed.
Horie was accused of conspiring with four other Livedoor execs to fake the firm’s financial data and boost its stated profits for fiscal 2004. Prosecutors noted that Horie boasted of his goal to make the company’s consolidated operating profit the highest in the world. They claimed that in trying to boost the profits, he and his fellow execs connived to falsify group company earnings and profits from sales of Livedoor stocks. The gap between actual and stated profits was 5.3 billion ($45 million), prosecutors charged.
The other four execs involved in the case have pleaded guilty, while Horie maintained his innocence following his arrest in January 2006.
In addition to his Fuji takeover bid, Horie drew media attention for his failed attempts to buy a pro baseball team in 2004 and win a seat in Parliament in 2005. He also wrote best-selling books on how to succeed in business and lived a high-flying, free-spending life as one of the “Roppongi Hills tribe” — a reference to the landmark Tokyo business, entertainment and condo complex that became home to Horie and other entrepreneurs aiming to change Japan’s stodgy business culture.