Senior Livedoor Co. officials have admitted during voluntary questioning that they disseminated false financial information regarding group companies but did not believe their actions were illegal, investigative sources said Saturday.
The executives, who include the Internet startup firm's chief financial officer, Ryoji Miyauchi, denied any involvement by Livedoor President Takafumi Horie, saying he was unlikely to have been aware of what was going on, the sources added.
Also Saturday, it was learned that prosecutors suspect General Consulting Firm Co., a consulting and accounting firm based in Yokohama that does accounting work for Livedoor may have been involved in the Internet firm's alleged falsification of earnings results.
The managing director handling the work related to Livedoor joined General Consulting as a director in July 2003, together with Miyauchi, sources said.
When Miyauchi, 38, worked at General Consulting, also as a managing director, he was involved in assessing stock prices in at least two cases involving Livedoor's corporate buyouts through stock swaps, the sources told Kyodo News.
A spokesperson at General Consulting said the firm could not comment on its connections with Livedoor.
The managing director in question, who has not been identified, moved to General Consulting from the auditing firm Koyo & Co., where he audited Livedoor's earnings results for the year ended September 2003, the sources said.
Livedoor allegedly falsified its parent-only earnings results for the business year ended September 2004.
Prosecutors believe Livedoor falsified its 2004 financial figures to show it had a profit when it was actually in the red in an attempt to raise its stock price.