Former Livedoor Co. President Takafumi Horie denied in court Tuesday that he had control over accounting at Livedoor Co., saying he had no knowledge of day-to-day transactions that allegedly violated securities laws.
Horie, 34, testifying for the first time in his highly publicized trial, painted former Livedoor Chief Financial Officer Ryoji Miyauchi, who has pleaded guilty in a separate trial, as having direct responsibility for running the company.
“The basic leader was Mr. Miyauchi in accounting,” Horie said during questioning by his defense team. Miyauchi has testified that Horie, while not directly in charge, shared responsibility for the wrongdoing.
The trial of Horie, founder and former president of Internet startup Livedoor, has drawn widespread media attention as a symbol of how the nation is grappling with the rise of dot-coms and their effect on the stock market.
The trial has also created interest because Horie has pleaded not guilty — a rare move in criminal trials. Many suspects sign confessions in advance to receive lighter sentences.
Prosecutors have repeatedly outlined a complex scheme of stock sales and splits, which they allege Horie orchestrated to inflate Livedoor’s earnings.
They have called several former Livedoor employees to the stand, including Miyauchi. They have testified that they reported the plans to Horie in meetings and via e-mail.
The verdict may turn on how much Horie knew about the alleged scams.
Horie testified he did not use maneuvers such as stock splits to inflate the price of Livedoor shares or to pump up the value of the company’s capital.
He argued the aim of the company was to maximize profits for investors, rather than to increase the company’s own value.
“I would never have thought of inflating sales through a scam,” Horie said.
Depicting Miyauchi as the true center of the company, Horie testified that at one point he had to beg a disgruntled Miyauchi not to quit, as he would not have been able to run Livedoor without him.
Several other Livedoor executives are being tried separately on charges related to the schemes that were allegedly used to inflate Livedoor’s earnings and the stock price. They have owned up to most of the charges and have been key witnesses for the prosecution at Horie’s trial.
Prior to his arrest in January, Horie was admired by many for quickly amassing a fortune and shaking up the old guard of the business world.
Dot-com stars are still a novelty in Japan, where business remains dominated by a conservative elite. Horie also stole the spotlight with his flamboyant attempts to purchase a professional baseball club and a media conglomerate.
Prior to his arrest, Horie said he intended to take advantage of loopholes in stock-trading laws to make a fortune.
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