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Wednesday, March 21, 2007

Murakami no inside trader, Horie testifies


Staff writer

Convicted Livedoor Co. founder Takafumi Horie on Tuesday found himself again before the Tokyo District Court, this time testifying in defense of financier Yoshiaki Murakami against charges of insider trading.

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Yoshiaki Murakami Takafumi Horie

Murakami, 47, founder of Japan's best-known investment fund, has pleaded not guilty to charges of insider trading involving shares of Nippon Broadcasting System Inc.

Sentenced by the same court Friday to 2 1/2 years in prison for violating the Securities and Exchange Law, Horie testified that his decision to purchase NBS shares was made only just before the February 2005 buyout try.

"I made my final decision right before the actual purchase," the 34-year-old claimed, challenging the prosecutors' allegations that he and former Livedoor Chief Financial Officer Ryoji Miyauchi tipped off Murakami about the takeover at least as early as November 2004.

Horie, out on 500 million yen bail, also claimed that if insider information was leaked to Murakami during a meeting on Nov. 8, 2004, as the prosecutors have alleged, he would have remembered.

Murakami took several minutes to question Horie himself after thanking the witness for appearing in court "despite the difficult circumstances" he is facing.

According to prosecutors, Murakami's core investment advisory firm, MAC Asset Management Inc. (now MAC Asset Management Pte. Ltd.), paid 9.95 billion yen to acquire about 1.93 million shares of NBS from Nov. 9, 2004, through Jan. 26, 2005.

The financier sold 5 million shares of NBS after Livedoor announced Feb. 8, 2005, that it had obtained a 35 percent stake in the broadcaster. The transaction reportedly made a profit of 3 billion yen for MAC Asset.

NBS was the largest stakeholder of Fuji Television Network Inc., the flagship of communications conglomerate Fuji Sankei group.

Prosecutors claim that because Horie and Miyauchi leaked their buyout plan to Murakami no later than Nov. 8, 2004, the transactions amounted to "illegally obtaining undisclosed information for profit."

During Tuesday's session, prosecutors cited e-mails sent between Livedoor's executives in late 2004 about the takeover of NBS, but Horie denied having made the final decision to buy the radio broadcaster until February 2005.

"There is no way that a decision could have been made at such an early stage," he said.

Horie, dressed casually in light purple shirt and beige pants, appeared more at ease than at his own trial.

The IT maverick told the judges that it was his goal to buy a media outlet ever since America Online Inc. acquired Time Warner Inc. in 2000.

But difficulties in securing funds and concerns expressed by other Livedoor executives over the huge investment made it impossible to decide to obtain NBS shares until only immediately before the purchase, he explained.

The focus of Murakami's trial is on how much prior information the financier had regarding Livedoor's NBS purchases and whether Livedoor seriously intended to take over the AM radio broadcaster from the start.

Livedoor's Miyauchi, who is awaiting his verdict Thursday for accounting fraud, has already appeared at Murakami's trial to testify against him.

Miyauchi claimed last December that he personally told Murakami about Livedoor's intention to buy a large stake in NBS at a meeting on Nov. 8, 2004, and that Horie was present at the meeting.

Murakami was arrested last June and his trial began in December. Shortly before his arrest, he had acknowledged he knew of Livedoor's takeover of NBS before it was made public, a fact that could be interpreted as insider trading.

But the former bureaucrat denied that charge in his opening statement in December, explaining that he had heard of the buyout in advance but "never thought (Horie) was serious."

Murakami's ex-subordinates who testified in his support denied insider trading, claiming Murakami first decided to own up to the charges "to save the fund's investors."



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