The nation’s business establishment lashed out at Livedoor Co. on Wednesday, with both the head of the country’s most powerful business lobby and the chief of the securities industry unleashing harsh words against the Internet startup.
Hiroshi Okuda, chairman of the Japan Business Federation (Nippon Keidanren), said Wednesday that the group’s decision to admit Livedoor Co. was premature and a mistake.
“Depending on the outcome of the ongoing investigation by prosecutors, we will have no choice but to take certain measures,” said the head of the nation’s most influential business lobby, suggesting it might either expel Livedoor or ask it to leave.
“Livedoor should abide by Keidanren’s code of ethics as a member,” Okuda said.
Nippon Keidanren decided in December to admit the high-flying Internet venture, which is now under investigation by prosecutors for possible accounting fraud and stock market manipulation.
Okuda’s remarks came a day after Nippon Keidanren approved Softbank Corp.’s bid to join the business lobby, making it the third mainly Internet-related firm to do so.
The other Internet-related firm belonging to Keidanren is online shopping mall operator Rakuten Inc., which joined in November 2004.
Meanwhile, the chairman of the Japanese Securities Dealers Association, Hiroshi Koshida, told a separate news conference that Livedoor executives should be “painfully aware” of their responsibility for ruining market trust in corporate accounting “just when the flow of funds is shifting to investments from savings.”
Koshida brushed aside criticism that JSDA did not take timely countermeasures against several stock splits by Livedoor and other companies.
The association “has taken necessary steps, such as requesting companies to refrain from major stock splits,” he said.
Softbank is a major IT holding company that controls Web portal Yahoo Japan Corp., among others. It also owns the Fukuoka Softbank Hawks baseball team.
FT lauds Horie
LONDON (Kyodo) The Financial Times praised Livedoor Co. President Takafumi Horie in an editorial Wednesday as personifying the “new forces challenging Japan’s traditional business order.”
“Much more is at issue than the legalities of what Mr. Horie did or did not do,” the editorial argues. “What is basically at stake is what he represents.”
It concludes that “irrespective of the outcome of the current investigation, Japan needs more, not fewer, aggressive mold-breakers like Horie.”
Prosecutors are investigating Horie and his Internet services group under Livedoor on suspicion of violating the Securities and Exchange Law.
The editorial, headlined “Japan’s old guard tastes revenge,” says that with Horie in hot water over allegations of accounting fraud and stock market manipulation, “a sigh of relief would sweep through many of the country’s boardrooms” if the iconoclastic entrepreneur were publicly discredited.
But the editorial notes it is not necessary to approve of Horie’s brash business style to appreciate his positive impact, calling him “an invigorating breath of fresh air in a country where individual initiative and new ideas are too often stifled at birth by hidebound bureaucracy and rigid corporate conformism.”
The paper also points out that in conducting deals that have often tested financial market rules, Horie has called public attention to the rules’ inadequacies, and this “has provided much-needed impetus for reforms to improve transparency and fairness in Japan’s clubbish capital markets.”
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