Yoshiaki Murakami, Japan’s best-known fund manager, took the stand for the first time in his own trial Tuesday, telling the court he initially owned up to insider trading to save other executives of his fund from being prosecuted.
Murakami, who once headed investment advisory firm MAC Asset Management Inc., now known as MAC Asset Management Pte., Ltd., is accused of engaging in insider trading of Nippon Broadcasting System Inc. shares. He has pleaded not guilty since his trial opened in December.
Taking the stand at the Tokyo District Court, the talkative 47-year-old financier said that during the first part of his three-day interrogation last June, he strongly denied allegations by prosecutors that he was told by executives of Livedoor Co. that they were prepared to invest in NBS in 2005.
But one of his partners, identified as Kenya Takizawa, called and persuaded him that if he went with the flow of the prosecutors’ arguments, it would help MAC Asset stay in business, he said.
“I was shocked, but if that was what everybody thought, then I decided that I’d do it,” he said. Murakami said his fund was managing 450 billion yen in investments at the time he was arrested June 5, 2006.
The former bureaucrat of the Ministry of Economy, Trade and Industry said he launched the fund management firm in 1999 with the intention of repairing Japan’s capital markets.
“This is supposed to be a capitalist society, which means that in its heart is the stock market, but I didn’t really think it was functioning properly,” Murakami said. “The commercial law states that the decision-makers are the shareholders, and so I wanted to get my opinions out to the companies.”
Prior to his arrest, Murakami rose to fame by aggressively taking over undervalued companies, an unusual practice in a conservative country where corporate stakeholders are traditionally related firms and banks who rarely sell their stock.
On Tuesday, Murakami said that before his arrest, he didn’t care whether he was viewed as money-hungry, but that he now regrets being so aggressive.
“I really enjoyed having accomplished many things, but now it’s over. It’s a mixed feeling of sadness and relief,” he said. “It’s extremely a tough job having to be entrusted with people’s assets and having to increase them. I don’t want to go back to that business again.”
Prosecutors say Murakami was involved in insider trading of NBS shares because he allegedly learned before Nov. 8, 2004, that Livedoor was preparing to attempt a takeover of NBS before the end of March 2005. According to the indictment, MAC Asset paid 9.95 billion yen to acquire about 1.93 million shares of the AM radio broadcaster from Nov. 9, 2004, through Jan. 26, 2005.
Murakami then sold 5 million NBS shares after Livedoor announced on Feb. 8, 2005, that it had suddenly acquired a 35 percent stake in NBS.