The Tokyo Stock Exchange said Monday it will delist scandal-tainted Livedoor Co. and subsidiary Livedoor Marketing Co. from its Mothers market for emerging firms on April 14 due to alleged accounting fraud.
The long-expected decision by the nation’s main stock exchange came after the Securities and Exchange Surveillance Commission filed a fresh criminal complaint against Livedoor and its former executives on similar charges earlier in the day.
The TSE will transfer Livedoor and Livedoor Marketing to its delisting post, where it will stay until April 13 to give shareholders time to sell holdings. The two firms will officially be delisted April 14.
“As far as I know, (Livedoor) concealed (corporate information) in a malicious manner and disclosed inaccurate information, which is unfortunate for 220,000 (Livedoor) stakeholders,” TSE President Taizo Nishimuro told reporters.
In a written statement, the TSE separately said it decided to delist Livedoor since it believes the company “intentionally and systematically” falsified financial documents, causing the bourse to deem the firm unqualified to be publicly traded on the market.
The SESC filed the criminal complaint with the Tokyo District Public Prosecutor’s Office against Livedoor founder Takafumi Horie, former Livedoor Chief Financial Officer Ryoji Miyauchi, former Livedoor Marketing Co. President Fumito Okamoto, former Livedoor Finance Co. President Osanari Nakamura, Livedoor Director Fumito Kumagai and Livedoor as a corporate entity.
The SESC asked prosecutors to charge Livedoor with falsifying its financial figures for the business year between October 2003 and September 2004 — a violation of the Securities and Exchange Law.
The SESC alleged that Livedoor inflated its earnings by 5.34 billion yen in bogus sales and claimed a pretax profit of 1.4 billion yen, although it actually had a pretax loss of 312.78 million yen.
Despite news reports earlier in the day over the expected Livedoor delisting, it did not seem to affect Livedoor’s stock price Monday. Shares began trading at 61 yen and ended at 66 yen, the same closing price as Friday. This compares with a peak of near 700 yen before prosecutors raided the firm in early January.
Livedoor’s stock trading has been limited to an hour a day since January to prevent a system overload like the one the initial run on its shares threatened to trigger.
Hiroshi Okuda, chairman of the Japan Business Federation (Nippon Keidanren), said Monday that Livedoor Co. might be expelled from the nation’s most influential business lobby if the ongoing investigation finds the firm engaged in more serious crimes than have been made public so far.
“Depending on future developments, Livedoor will either stay in or leave the federation,” Okuda said.
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