Like rats fleeing the sinking ship, Livedoor Co. subsidiaries moved closer to severing ties with their beleaguered parent Thursday, aggravating its bid to recover under new President Kozo Hiramatsu.
Used-car dealer Livedoor Auto Co. said Thursday its board decided to terminate its capital and operational tieup with Livedoor and it will ask the company to part with its stake.
Media Exchange Inc., another Livedoor group firm, said the same day it would try to cut ties by asking Livedoor to sell its stake to a company of its choosing. President Shin Yoshimura told reporters the network connection firm is getting offers from several potential buyers but didn’t elaborate.
Livedoor Auto said a management buyout is among options it is considering to break from Livedoor. It also announced that President Hiroshi Haneda had resigned and Director Hirofumi Inoue had replaced him.
The reshuffle was apparently made because Haneda is one of the minimum three board directors left after founder Takafumi Horie and three other execs resigned in the wake of their arrest over alleged securities exchange law violations, and wouldn’t be able to quit immediately.
Livedoor Auto joined the group last year and changed its name from Jac Holdings at the beginning of this year. Livedoor has a 51 percent stake in the firm.
By becoming part of the high-flying Livedoor group, the used-car dealer had hoped to boost its public recognition and take full advantage of Horie’s celebrity status, using him in TV commercials that began appearing late last year.
But after prosecutors began probing the group and Horie was arrested, Livedoor Auto was quick to distance itself from its fallen icon and sought a name change.
Media Exchange’s Yoshimura said the company has been suffering from the negative impact of the scandal, noting that some businesses have begun asking for advance payment.
Livedoor made the firm a subsidiary late last year after acquiring a 51 percent stake.
Possibly mindful of public skepticism about the firm’s motives for joining the Livedoor group, Yoshimura stressed the decision was based on solid business grounds, saying its network connection services offered synergies with Livedoor’s Net business.
Still, when asked how he felt about joining the Livedoor group, he said, “Looking back, I have to apologize for what I’d overlooked.”
Livedoor’s share value has plunged since the firm was raided and Horie and the other executives were arrested last month. They remain in custody, without charges.
Fuji hit by Livedoor
Fuji Television Network Inc. on Thursday raised its earnings estimates for fiscal 2005, which ends in March, but is expected to post a group net loss due to a sharp fall in the stock price of Livedoor Co., in which it is a major shareholder.