Court awards $15.7 million to shareholders
TOKYO — The Tokyo District Court has awarded $15.7 million to a shareholder group suing onetime high-flying Internet startup Livedoor and its former prexy, Takafumi Horie.
According to Thursday’s ruling, Livedoor and Horie are liable for damages for misleading investors by falsifying balance sheets. The investor group, numbering 402 individuals, had originally asked for $47.2 million.
Horie, who built Livedoor into one of the best performers on the Tokyo Stock Exchange, was found guilty in 2007 of conspiring to fake profit numbers to boost Livedoor’s stock price in 2005.
The exec wanted to bump up Livedoor’s value before mounting a hostile take over of radio broadcaster Nippon Broadcasting — a prelim to wresting control of parent company Fuji TV.
The attempt failed, but Fuji bought a 12.7% stake in Livedoor, worth $472 million, as part of a peace pact with Horie.
Following Horie’s arrest on charges of securities fraud, Livedoor’s stock price tanked, and Fuji took a $370 million loss.
Horie’s fall triggered a massive stock selloff that analysts dubbed the “Livedoor shock,” with thousands of small Livedoor investors following their onetime biz guru over the cliff.
In addition to Thursday’s victorious investor group, hundreds of other Livedoor shareholders have filed suits against the company. In a related case in May, the Tokyo District Court ordered that $81 million in damages be paid to another group.
Horie is appealing his sentence of 2½ years in prison for securities fraud to Japan’s Supreme Court.