Takafumi Horie is out as head of Livedoor Co.
At a news conference Tuesday night, officials of the Internet firm said Kozo Hiramatsu, 60, a former Sony executive who previously was head of a Livedoor subsidiary, had become president and director Fumito Kumagai, 28, had become representative director.
In a related move, Fuji Television Network Inc. said it is now free to sell its 133.74 million shares of Livedoor because Horie’s resignation has voided its agreement not to sell them without the company’s consent until September 2007.
Fuji TV bought the shares for 44 billion yen last year to form a business alliance with Livedoor Co. and end an acrimonious takeover bid for Nippon Broadcasting System Inc., which was then Fuji TV’s largest shareholder.
Fuji’s stake accounts for 12.75 percent of the Internet company’s outstanding shares.
Ryoji Miyauchi, Livedoor’s chief financial officer, who was also arrested Monday night, resigned from the board, the firm said.
Kumagai said at the Tuesday evening news conference that Horie had told his attorney he wanted to resign as president and representative director.
But it was not clear if he wanted to leave his position as director, Kumagai said, so Horie would remain on the board.
Kumagai said management is not considering selling Livedoor or changing its corporate name.
Speculations are rife that some investors are thinking of buying out the scandal-hit company, which still has a considerable amount of cash and holds several valuable companies.
“We have felt our governance over (legal) compliance was not enough,” Hiramatsu told the news conference, apologizing over the arrests of Horie and the other executives.
Hiramatsu can not become the representative director, legally the top position in a firm in Japan, until he gets shareholder approval.
The new president will take up his position immediately, according to the company.
He had been head of Livedoor subsidiary Yayoi Co., a maker of accounting software.
The new team faces the daunting task of keeping the company afloat amid a series of charges that have thrown Livedoor’s very existence into question.
Investors, meanwhile, continued to dump Livedoor shares, spooked by a possible delisting from the Tokyo Stock Exchange.
Livedoor ended Tuesday trade at its lower daily limit of 176 yen, down 31.25 percent from the day before.
The shares have tumbled by the daily limit every session since police launched a surprise raid on the company and Horie’s residence Jan. 16, shedding nearly three-fourths of their value.
To avoid a repeat of a shutdown that occurred last week, the Tokyo bourse said Tuesday it will shorten the trading hours of Livedoor stock, beginning on Wednesday, by delaying the start of its afternoon trading to 1:30 p.m.
The restrictions come on the heels of shorter hours applied to all listed shares, whose trading now starts at 1:00 p.m., 30 minutes later than usual, to avoid a system overload.
The TSE rebounded strongly Tuesday, with the benchmark Nikkei average rising 288.24 points, or 1.88 percent, to close at 15,648.89.
There was a perception among investors that they hit the peak of the bad news with the arrest of Horie, said Tsuyoshi Segawa, strategist at Shinko Securities Co. “The worst part of the Livedoor storm is over.”