The remaining three members of the Livedoor Co. board of directors, who held seats when founder Takafumi Horie was running the Internet services company, will resign before a shareholders’ meeting in June as the scandal-plagued firm tries to salvage its image, sources said Monday.
The extraordinary shareholders’ meeting is expected to approve a motion to replace the three — Representative Director Noriyuki Yamazaki, Director Hiroshi Haneda and Fumito Kumagai, a director now in police custody, the sources said.
About five new directors are expected to join the board, including President Kozo Hiramatsu, who took the helm during Livedoor’s leadership crisis following Horie’s arrest on Jan. 23, and Vice President Yukihiro Shimizu. Other new directors will likely include people from outside the company.
Kumagai became the firm’s representative director following Horie’s arrest on suspected securities law violations. But his right to represent the firm was transferred to Yamazaki after Kumagai himself was arrested Feb. 22 on suspicion of playing a role in the alleged fabrication of Livedoor’s financial report for the business year to Sept. 30, 2004.
Kumagai has remained on the board of Livedoor even after his arrest to enable the firm to continue making management decisions. The Commercial Code requires that a joint-stock company have at least three directors.
After an acting director is picked, Kumagai will step down, the sources said.
Livedoor concluded that if the three directors had stayed on, it would be impossible to win over shareholders, business partners or any potential corporate savior, they said.
Livedoor is planning to look harder for a sponsoring company, and is looking to reinvigorate its business in the coming weeks.
Cecile sale mulled
Livedoor Marketing Co. is considering selling its stockholdings in Cecile Co. to Livedoor Co. as one of the options for its group reorganization plans, Cecile President Sota Satani said in an interview.
Livedoor Marketing, an Internet advertising firm of the Livedoor group, has an equity stake of 69 percent in Cecile, a leading mail-order company.
But Livedoor Marketing said in February it will review its capital relationships with Livedoor, which has been rocked by an unfolding accounting fraud scandal, as well as with Cecile, and will consider changing its name.
Satani, meanwhile, expressed his company’s hope to remain in the Livedoor group, saying, “We just decided to tie up last October. Then we suffered from the Livedoor shock, but the introduction of knowhow for sales promotion utilizing the Net and the telephone has been going well.”
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