Ryoji Miyauchi played the role of star witness for the prosecution Friday on Day 2 of Yoshiaki Murakami’s insider trading trial.
Miyauchi, the ex-Livedoor chief financial officer who has pleaded guilty in his own trial for accounting fraud at the Internet firm and has already appeared at Takafumi Horie’s trial to testify on the Livedoor founder’s involvement, told the Tokyo District Court that he and Horie told financier Murakami that Livedoor was about to buy one-third of Nippon Broadcasting System Inc.
Prosecutors are trying to establish that the one-time government bureaucrat was told in advance about the AM radio station deal and made money on the information. Murakami has pleaded not guilty.
Miyauchi testified under direct examination that he personally told Murakami at a meeting on Nov. 8, 2004, that Livedoor was preparing to buy a huge NBS stake.
Horie, whose trial is still being heard, was also at the meeting, Miyauchi said.
Prosecutors are arguing that Murakami took the information he got from the November meeting and had his core investment advisory firm, MAC Asset Management Inc., acquire about 1.93 million NBS shares, worth 9.95 billion yen, between Nov. 9, 2004, and Jan. 26, 2005. The investment firm has since become MAC Asset Management Pte. Ltd.
Miyauchi said the two sides met again on Jan. 6, 2005, when Horie told Murakami that Livedoor wanted to take over NBS. Murakami advised them to do the takeover by buying NBS shares on the market and not through a tender offer, Miyauchi claimed, adding that he and Horie told him they didn’t want to go that route as it would cause the share price to go up and make it difficult for Livedoor to purchase their target amount.
“Mr. Murakami told us not to use the term TOB in front of him because that would mean insider trading,” Miyauchi said. “But I thought this was already insider trading.”
After the meeting, Livedoor opted to buy 4.9 percent of NBS shares on the market and began its TOB, Miyauchi said.
After Livedoor announced on Feb. 8, 2005, that it had obtained a 35 percent stake in the broadcaster, the financier sold nearly 6 million shares, raking in 3 billion yen.