A former president of Liquid Audio Japan, an Internet-based music delivery firm, was arrested with four other people Wednesday on suspicion of kidnapping and confining a former executive of the firm.

The arrested include Masafumi Okanda, 32, the former company president, and Tsutomu Kaizuka, 42, an executive at a finance company, Metropolitan Police Department officials said.

According to the MPD, the suspects conspired to kidnap the 33-year-old victim, then a board member of Liquid Audio, in June 1999 from a Tokyo hospital. The victim was not identified.

After abducting him, they drove him around in a car and took him to a hotel, where they kept him blindfolded and handcuffed in a room for three days until releasing him in a forest on a mountain in Yamanashi Prefecture.

Okanda, who was also a board member at the time, was reportedly at odds with the man over business strategy, police officials said.

Police suspect Okanda kidnapped and confined the man to stop him from traveling to the United States to launch a music delivery business there, the officials said.

Okanda allegedly paid Kaizuka and the others to intimidate the man into abandoning his plan. Upon his arrest, Okanda told investigators he “did not remember” making a request of this nature, the officials said.

After the incident, the man quit Liquid Audio at the end of the same month and established a computer software firm the following month.

He filed a complaint with police against Okanda and the others in April but was arrested in June on suspicion of illegally accessing Liquid Audio’s computer system.

Liquid Audio was established in July 1998 with capital participation from Hikari Tsushin, a major retailer of cellular phones.

Last December, Liquid Audio became the first company to list its shares on the Tokyo Stock Exchange’s new Mothers market for startup venture companies. It drew market players’ attention in February after its share price hit a high of 12.21 million yen, about four times the price of its initial public offering.

However, following a split, its share price has collapsed to between 400,000 yen and 500,000 yen amid slumping business performance and rumors of close underworld ties.

Later on Wednesday, TSE officials questioned several current executives of the firm in connection with the alleged abduction.

A spokesman for Liquid Audio said he knows nothing about the case.

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