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Livedoor CFO Denies Problems With Buyout
The chief financial officer of an Internet startup at the center of a highly publicized securities fraud investigation has told prosecutors he wasn't aware of irregularities in a corporate buyout, news reports said Sunday.
Livedoor Co. CFO Ryoji Miyauchi has also said the company's popular chief executive, Takafumi Horie, was not involved in the deal, the business daily Nihon Keizai Shimbun reported.
Miyauchi's denials came on the same day as the funeral of a former Horie colleague, Hideaki Noguchi, who was found dead Wednesday in a suspected suicide.
Media reports have alleged that Horie and Miyauchi, with the help of Noguchi, ordered the disclosure of false information during the takeover of publisher Money Life by a Livedoor subsidiary in 2004.
Livedoor is suspected of concealing that it already owned the publisher through an investment fund subsidiary, according to the reports.
The Internet company has denied the allegations, saying the investment fund was not part of Livedoor.
Miyauchi has told prosecutors he directed the deal, but that Horie was not directly involved and neither were aware of irregularities, according to the Nihon Keizai.
Two other executives of the Livedoor group, Fumito Kumagai and Fumito Okamoto, have also been questioned, and Horie would soon be summoned, the report said.
Officials of the Tokyo Prosecutors Office were not available for comment Sunday.
The widening investigation has sparked turmoil in Japanese financial markets, with shares plunging after prosecutors raided Livedoor's offices last Monday _ though the Nikkei 225 index recouped some of its losses by Friday.
Still, the flood of orders wreaked havoc with the Tokyo Stock Exchange's trading system, forcing it to halt trading early on Wednesday and shorten its afternoon sessions over the next two days.
A top finance official downplayed fears that the investigation and market turmoil, which the press has dubbed "Livedoor shock," would choke off Japan's nascent economic recovery.
"There's no worry whatsoever, because the problem is limited to Livedoor," Financial Services Minister Kaoru Yosano said Sunday on public broadcaster NHK.
"The economic fundamentals of Japan will not waver over this incident," Yosano said.
The investigation has attracted intense media attention partly because of the fame of Horie, 33, an entrepreneur whose bold takeover attempts have earned him both adulation and contempt.
Horie, once a frequent guest on TV shows and author of books like "How to Make 10 Billion Yen," also ran unsuccessfully for parliament in September.
Started by the entrepreneur in 1997, Livedoor has bought up a spate of companies through share swaps and by offering more of its own stock _ deals that have drawn particular scrutiny from prosecutors.
Media reports have said Livedoor is also suspected of concealing a 1 billion yen ($8.7 million) loss for full-year results ending September 2004, among other allegations.
The Tokyo exchange has said that Livedoor, which trades on the Mother's market of emerging companies, is in danger of being delisted from the bourse.
Copyright 2007 Associated Press. All right reserved. This material may not be published, broadcast, rewritten, or redistributed
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