Livedoor Co. founder Takafumi Horie has owned up to part of the accounting fraud charges against him and the Internet and financial services firm for the first time since his January arrest, according to prosecution sources.
Horie recently admitted having padded Livedoor’s sales figures in 2004 by about 1.58 billion yen, which was booked as profit from a false deal with a company Livedoor was then in talks with over a possible acquisition, the sources alleged.
However, Horie continues to deny that Livedoor counted as sales the profits it gained from selling stocks issued to buy other companies through share-swaps — an action that would constitute a violation of the Securities and Exchange Law.
In the latest development of the scandal that is gripping the nation, Horie and four current or former Livedoor executives were charged Tuesday with falsifying the company’s financial statements for the business year to September 2004.
The five men and the company stand accused of inflating Livedoor’s financial figures to make it appear the firm had a group pretax profit of 5 billion yen for the year, when it actually had a pretax loss of about 300 million yen.
Prosecutors claim former Livedoor Chief Financial Officer Ryoji Miyauchi and Livedoor Director Fumito Kumagai hatched a plot to inflate the earnings figures, while Miyauchi conceived a plan to post fictitious sales to its two subsidiaries, online matchmaker Cueznet and Royal Shinpan, a financial arm of Livedoor group now called Livedoor Credit Co.
The three others charged in the case are Kumagai, Former Livedoor Director and Livedoor Marketing Co. President Fumito Okamoto, and former Livedoor Operating Officer and Livedoor Finance Co. President Osanari Nakamura.
On Thursday, the Tokyo District Court granted Miyauchi bail of 50 million yen, Nakamura’s release on 20 million yen, and Okamoto on 10 million yen. It turned down requests from Kumagai and Horie, who may to file a complaint.
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