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Saturday, Feb. 23, 2008

TRYING TO AVOID PRISON

Horie's appeal starts at Tokyo High Court


Staff writer

The counsel for Livedoor Co. founder Takafumi Horie pleaded not guilty to charges of accounting fraud Friday as Horie's Tokyo High Court appeal trial began.

News photo
Takafumi Horie KYODO PHOTO

Last March 16, the Tokyo District Court ordered Horie to serve 2 1/2 years in prison for falsifying financial statements and violating the Securities and Exchange Law.

"The original verdict (handed down by the district court) had grave, wrong fact recognitions, law violations, and argument discrepancies," the defense claimed in a statement submitted to the court. "I request (the high court) to discard the original verdict and to find the defendant innocent."

Once hailed as an IT prodigy for turning a small Internet startup into an influential conglomerate, Horie, 35, did not appear at the trial himself.

"Although he himself is ready to attend, (his appearance at the court) is expected to cause a commotion, and (he is) not obliged (to attend)," his lawyer, Yasuyuki Takai, said to reporters before the trial.

The disgraced entrepreneur, who was held for three months following his arrest, is currently out of jail on bail of ¥500 million.

The lower court ruled that Horie conspired with four senior Livedoor executives to report a pretax profit of ¥5 billion for the business year through September 2004, instead of an actual loss of ¥300 million.

"The defendant did not have any motive to raise (corporate) sales even by violating laws," the defense claimed.

The district court also convicted Horie of manipulating the market by spreading false information on the takeover of a publisher by an affiliate, Livedoor Marketing, to raise Livedoor's stock price.

"It is not that (Horie) unjustly raised Livedoor's share prices by announcing window-dressed business results, or stock splits," the defense said. "It is impossible (for Horie) to artificially hike the share prices for years."

The next court session is now scheduled to be held March 28. Horie's lawyers think the court may rule around July.

The lower court earlier found seven people, from Livedoor and another company, guilty.

Four, including Horie, filed appeals against the rulings.

"Since living under the bail conditions, he has not traveled abroad (recently)," lawyer Takai said.

"I think he has made several trips inside the country, some of them in response to his supporters' invitations," Takai explained.

A dropout from the University of Tokyo, Horie began attracting major media attention in 2004, when Livedoor tried to buy the Kintetsu Buffaloes baseball team.

He then launched a takeover bid for radio broadcaster Nippon Broadcasting System Inc. a year later in a high-profile drama that drew national attention to mergers and acquisitions activity and threatened the Fuji Sankei media group.

The T-shirt-clad maverick disregarded traditional Japanese business practices and expanded his firms through mergers, acquisitions, after-hours trading and stock splits.



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