Prosecutors appear ready to serve fresh arrest warrants in mid-February on four now-former Livedoor Co. executives, including ex-President Takafumi Horie and former Chief Financial Officer Ryoji Miyauchi, on suspicion of falsifying the company’s 2004 financial statements, investigative sources said Friday.

The warrants on the former Livedoor executives are expected to be served by Feb. 13, when their detention period expires. On Friday, the Tokyo District Court extended their detention for 10 days.

Horie, 33, Miyauchi, 38, and two other Livedoor executives were arrested Jan. 23 for allegedly releasing fabricated financial data in connection with a corporate takeover involving a Livedoor subsidiary in violation of the Securities and Exchange Law.

Livedoor also allegedly falsified its financial statements for the business year to September 2004 by posting a parent-only pretax profit of 1.4 billion yen, although it actually incurred a pretax loss of 1.0 billion yen.

Livedoor is suspected of having booked proceeds from sales of new shares issued in connection with a series of takeover deals as extraordinary profits.

Such proceeds from share sales, which are not related to the company’s business performance, should have been booked as capital on its balance sheet.

Such “profits” for fiscal 2004 and 2005 totaled 7.1 billion yen, the sources alleged.

The Tokyo District Public Prosecutor’s Office special investigative unit has apparently decided to build its case on a part of this figure.

Prosecutors have already found that Livedoor recorded fictitious share sales to matchmaker Cueznet Co., now a Livedoor subsidiary, and moneylender Royal Shinpan Co., which later changed its name to Livedoor Credit Co., in its September 2004 financial statement.

The two firms were allegedly already under Livedoor’s control by the time the sales to the Internet firm were booked.

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