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Prosecutors are investigating the Murakami fund for possible insider trading in connection with its Nippon Broadcasting System share transactions last year, sources said Friday.

Investigators from the Tokyo District Public Prosecutor’s Office have questioned executives at the fund, led by former bureaucrat Yoshiaki Murakami, and others, including former Livedoor Co. executives, the sources said, adding they plan to question Murakami himself soon.

Livedoor, accused of accounting fraud, at one time held a large equity stake in NBS in a battle with Fuji Television Network Inc. for control of the radio station.

The Murakami fund became NBS’s largest shareholder in 2004, with a stake of more than 18 percent, according to the sources and reports the fund submitted to the Finance Ministry.

It then acquired a large number of additional NBS shares shortly before Fuji TV announced a public tender offer on Jan. 17, 2005, for shares in the the radio station in a bid to take it over.

Several weeks later, on Feb. 8, Livedoor, which also wanted it, announced it had acquired a 35 percent stake in NBS mainly through off-hours transactions.

The Murakami fund is believed to have sold some of its Nippon Broadcasting stake to Livedoor for a large profit. At the end of February 2005, the fund’s NBS stake had fallen to 3.44 percent.

If the Murakami fund had foreknowledge of Fuji TV’s tender offer and Livedoor’s intention to buy when acquiring Nippon Broadcasting shares, it could constitute insider trading, which is prohibited under the Securities and Exchange Law.

Tokyo prosecutors have questioned former Livedoor Chief Financial Officer Ryoji Miyauchi, former Representative Director Fumito Kumagai — two of four former Livedoor executives on trial for accounting fraud — executives at Livedoor affiliates and securities company officials, in addition to Murakami fund officials, the sources said.

The investigators are looking for details on the trades in Nippon Broadcasting shares and how the acquisitions were financed, the sources said.

“We think there is no problem as we are complying with regulations,” the Murakami fund said in a statement released Friday morning.

The fund, led by Murakami, an outspoken former trade ministry bureaucrat, has been involved in a series of very public stock purchases, including shares in the Osaka Securities Exchange, Tokyo Broadcasting System Inc. and Hanshin Electric Railway Co.

Currently, Hankyu Holdings Inc. is trying to buy some or all of the fund’s 47-percent stake in Hanshin. Hankyu launched a public tender offer Tuesday for Hanshin shares in an attempt to take the firm over.

The amount of funds it manages has jumped to more than 400 billion yen from some 4 billion yen at the time of its establishment in 1999.

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