The Tokyo High Court on Friday upheld the guilty verdict against former Livedoor Co. executive Ryoji Miyauchi for falsifying financial statements but reduced his prison sentence to 14 months.
Miyauchi, the former Livedoor chief financial officer and closest aide to company founder Takafumi Horie, was previously found guilty and sentenced to 20 months by a district court. Horie, who was sentenced by the high court to 2 1/2 years in February, pleaded innocent and is appealing the ruling to the Supreme Court.
Miyauchi, 41, who pleaded guilty to securities and exchange law violations, had sought a suspension of the 20 months handed down by the Tokyo District Court in March 2007.
Miyauchi’s lawyer said they were considering an appeal.
Chouhei Yonekawa, a lawyer for a group of 3,342 plaintiffs filing a damages suit against Miyauchi and Horie, said after Friday’s ruling they were unhappy about the reduction of Miyauchi’s prison term.
However, he praised the court for sustaining the prison sentence, noting that in the past, most defendants charged with financial crimes received only a suspended term.
“The decision (of a prison term) sends a message that the court is willing to take strong action against companies that falsify statements to give the impression that they are a growing company with potential,” he said.
On Friday, presiding Judge Taketaka Nakagawa said the high court recognized that Miyauchi, the No. 2 man in the firm after Horie, was involved in Livedoor’s falsification of financial statements and should be held accountable.
However, the high court said there were grounds for reducing Miyauchi’s term, in part because he cooperated with prosecutors during the investigation and settled with some 400 plaintiffs so far by offering a total of ¥60 million in compensation.
Miyauchi has also provided some of his assets as payment to other plaintiffs who claim their losses from obtaining Livedoor shares were the result of the IT firm’s false statements, the court pointed out.
Miyauchi was involved in making the false claim on the fiscal 2003 business statement that the firm had a pretax profit of ¥5 billion when in fact it had incurred a ¥300 million loss.