State wants Murakami to forfeit 1 billion yen

Prosecutors also seek three years, fine in fund manager's insider trading trial By

by Jun Hongo

Prosecutors on Friday asked the Tokyo District Court to send Yoshiaki Murakami to prison for three years, fine him 3 million yen and make him forfeit 1.1 billion yen to cover the estimated profit he made in 2004 and 2005 on alleged insider trading involving Nippon Broadcasting System Inc.

Prosecutors asked the court to give Murakami the biggest-ever financial penalty for insider trading, describing him as “lacking even the minimum of ethics” for using inside information about Livedoor Co.’s plan to buy shares in NBS to make a profit.

“The crimes were not committed based on information obtained by chance, but under conditions the accused created himself in order to make a huge profit,” one prosecutor told the court.

The prosecutors also demanded that MAC Asset Management Inc., the investment consulting firm formerly owned by Murakami and now run by MAC Asset Management Pte., Ltd. in Singapore — on whose board Murakami sits — pay a fine of 300 million yen for its involvement.

Murakami, once the country’s most illustrious fund manager, has pleaded not guilty to all the charges. The former trade ministry bureaucrat, dressed in a navy suit and indigo tie, closed his eyes and knit his brows together every time a member of the prosecution team leveled a charge against him.

Murakami was allegedly tipped off that Livedoor Co., then headed by Takafumi Horie, was going to make a bid for NBS shares by the end of March 2005.

Prosecutors charge that Murakami was aware of the takeover plan by at least Nov. 8, 2004, and between Nov. 9, 2004, and Jan. 26. 2005, he had MAC Asset pay a combined 9.95 billion yen for about 1.93 million shares in the radio broadcaster.

MAC Asset allegedly made a profit of 3 billion yen selling 5 million of its NBS shares after Livedoor announced on Feb. 8, 2005, that it had acquired a 35 percent stake in the radio broadcaster, which drove the share price up.

Livedoor wanted a controlling stake in NBS so it could control its subsidiary at the time, Fuji Television Network, the flagship company of the Fuji Sankei media conglomerate.

The focus of the trial has been on whether Murakami had enough information prior to the purchase to have caused his decision to buy the NBS stock.

Murakami admitted to reporters last June, just prior to his arrest, that he knew Livedoor would acquire the NBS shares before the transaction was made public and acknowledged his actions could be construed as insider trading.

However, he changed his story when the trial began last December, claiming he knew Livedoor wanted to get the NBS stake, but believed the plan was unworkable. He told the court that his statements to the media were only an attempt to take the blame himself and to prevent other MAC Asset employees from being arrested.

Horie, who was sentenced to 18 months in prison in March for his role in the falsification of Livedoor financial statements, testified on Murakami’s behalf in December, saying he made the final decision to make a bid for the NBS shares “right before the actual purchase” in February 2005.