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Former Livedoor Co. President Takafumi Horie’s lawyers conceded Wednesday the Internet firm may have been guilty of some accounting fraud but argued that Horie was not guilty on the grounds that he believed the firm’s accounting practices were legal, sources said.

The admission came during the seventh pretrial meeting between the defense lawyers and prosecutors at the Tokyo District Court to prepare for Horie’s trial, on charges that he participated in the fraud, the sources said.

Livedoor’s financial report for the year to Sept. 30, 2004, includes 1.58 billion yen in sales allegedly from fictitious deals with two firms that were due to be taken over by the Net firm.

The sources quoted a defense team member as saying 1.3 billion yen of that figure was from “undue accounting procedures, including what may well be called window-dressing.”

The lawyers claimed Horie, 33, was not guilty of the fraud charges against him because he considered the accounting practices to have been legal.

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