Japan dot-com star jailed for fraud

Takafumi Horie sentenced after being found guilty of securities laws violations.

    Takafumi Horie pleaded not guilty and said
    he had "been framed" [Reuters] 

    In Japan, executives charged of such wrongdoing generally get a suspended sentence, and avoid prison.

    Chief Judge Toshiyuki Kosaka said Horie masterminded an elaborate network of decoy investment funds that were "established for the purpose of evading the law" and to "manipulate Livedoor's accounting".
     
    "At that point, the prosecutors case was proven," he said.
     
    Horie, dressed in a dark suit and tie instead of his normal casual attire that infuriated the business community, sat passively as the verdict was read, shuffling through papers on his desk.
     
    Clash of cultures
     
    His trial, which opened in September last year, had drawn widespread media attention here with the outspoken millionaire seen as a symbol of a new style of entrepreneurship in Japan.
     
    Corporate culture in Japan has long been dominated by big-name companies that conducted business through a cosy network of group-linked companies.
     
    Some analysts say companies such as Livedoor that made aggressive acquisitions were just beginning to emerge, and Japan still lacked clearly defined laws to police such moves.
     
    Horie tumbled from stardom when prosecutors raided his company last year and then arrested him.
     
    He was held for three months, but did not sign a confession as most suspects do in Japan, often to get a lighter sentence.
     
    Some Livedoor shareholders were pleased by the verdict, saying it recognised the financial damage they suffered because of the fraudulent accounting.
     
    Livedoor, which operated an internet portal and offered web-related services, drew a large number of individual investors, partly because of Horie's fame.
     
    Those investors, many of them amateurs at the stock market, took big losses when Livedoor shares nose-dived after Horie's arrest.
     
    The case has also received widespread attention because Horie asserted his innocence instead of confessing. Most criminal trials in Japan end with guilty verdicts.
     
    Other Livedoor executives, including Ryoji Miyauchi, the former chief financial officer, are being tried in a separate trial on charges of securities laws violations.
     
    A ruling is expected on March 22. Miyauchi, who pleaded guilty, has been a key prosecution witness against his former boss and friend and has testified that Horie orchestrated the schemes.

    SOURCE: Agencies


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